AM Best Downgrades Credit Ratings for Members of Mid-Hudson Group

OLDWICK, N.J., December 09, 2022--(BUSINESS WIRE)--AM Best has downgraded the Financial Strength Rating (FSR) to B++ (Good) from A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to "bbb+" (Good) from "a-" (Excellent) of Claverack Cooperative Insurance Company, Midrox Insurance Company and Mid-Hudson Co-Operative Insurance Company. These companies are collectively referred to as Mid-Hudson Group and are domiciled in Montgomery, NY. The outlook of the FSR has been revised to stable from negative while the outlook for the Long-Term ICR is negative.

The Credit Ratings (ratings) reflect the group’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The ratings reflect unexpected deterioration in policyholder surplus at Sept. 30, 2022, which resulted in a corresponding decline in overall risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). This decline caused the overall balance sheet assessment to be revised downward to strong from very strong. Several factors contributed to this decline: an increase in the number of large property fire losses, changes in case reserving practices and increased reinsurance costs. In addition, the group reported sizable unrealized investment losses, all contributing to a 32.7% decline in policyholder surplus at Sept. 30. In total, the group reported $5.3 million in underwriting losses and a combined ratio of 132.9%, with $4.1 million in unrealized investment losses that led to the year-to-date surplus decline.

A negative outlook had been placed on the group’s ratings on Aug. 10, 2022, which reflected deterioration in the group’s operating performance over the past four years as the group reported unfavorable underwriting results from fire losses and weather-related events, as well as increased reinsurance costs.

The continuation of the negative outlook on the Long-Term ICR reflects deterioration in the group's operating results. While management has taken corrective action to improve operating performance, stabilization in operating performance metrics will need to materialize to avoid negative rating action over the intermediate term. Additionally, if the group's operating performance and balance sheet metrics continue to deteriorate, it may bring into question the overall effectiveness of the group’s ERM program. The revised outlook on the FSR to stable reflects the expectation that the group will be able to maintain its strong balance sheet metrics while corrective actions are implemented.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

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