AM Best has downgraded the Long-Term Issuer Credit Rating (ICR) of Shelter Mutual Insurance Company and its property/casualty (P/C) subsidiaries from “a+” (Excellent) to “a” (Excellent), while affirming their Financial Strength Rating (FSR) of A (Excellent). Shelter Life Insurance Company, a wholly owned subsidiary of Shelter Mutual, also saw its Long-Term ICR downgraded to “a” from “a+,” with its FSR of A (Excellent) affirmed. The outlook for the Long-Term ICRs has been revised to stable from negative, and the outlook for the FSR remains stable.
These downgrades reflect the group’s weaker underwriting performance compared to peers, driven by significant weather-related losses, particularly in regions with high geographic concentration for Shelter. Over the past five years, Shelter has faced persistent underwriting losses, including three years of operating losses, largely due to hurricanes and winter storms. However, the group’s reinsurance business has shown improved profitability. Shelter is implementing strategic initiatives, including substantial rate increases, aimed at returning to profitability, although underwriting profitability is not expected in the near term. Despite these challenges, AM Best continues to assess Shelter’s balance sheet strength as the strongest, bolstered by the highest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR).
Shelter Life’s ratings reflect its very strong balance sheet, adequate operating performance, neutral business profile, and appropriate enterprise risk management (ERM). The Long-Term ICR downgrade for Shelter Life results from the removal of the rating lift it previously received from its parent company, Shelter Mutual. Shelter Life continues to maintain the strongest level of risk-adjusted capitalization and a conservative investment portfolio, while achieving profitability over the past five years.
The following property/casualty subsidiaries of Shelter Mutual had their Long-Term ICRs downgraded to “a” from “a+,” and their FSRs affirmed at A (Excellent) with a stable outlook:
- Haulers Insurance Company, Inc.
- Shelter General Insurance Company
- Shelter Reinsurance Company
- AmShield Insurance Company
For further details on the ratings and disclosures, visit AM Best’s website.
About AM Best
AM Best is a global credit rating agency, news publisher, and data analytics provider focusing on the insurance industry. With headquarters in the U.S. and regional offices across the globe, AM
