AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a” from “a-” of Petroleum Marketers Management Insurance Co. (PMMIC), based in Des Moines, Iowa.
The outlook for the ratings has been revised to stable from positive.
PMMIC’s niche market focuses on the underground storage tank (UST) and above ground storage tank (AST) pollution liability market.
The ratings reflect PMMIC’s balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
The ratings upgrade reflects PMMIC’s continued improvement in balance sheet strength, particularly in the favorable reserve development trends from its large loss portfolio transfer with the Iowa Underground Storage Tank State Fund. This development, coupled with continued favorable underwriting/operating returns, has continued to aid the company’s risk-adjusted capitalization levels. In recent years, the company has been able to return a significant amount of capital to investors through share repurchases, due to its already elevated capital position.
The ratings also recognize management’s long experience in the UST and AST businesses and its prudent business plans over the near term. PMMIC’s operating ratios, which have outperformed the industry composite, reflect its strict underwriting guidelines, with an emphasis on loss control, beneficial cost structure due to its management contract with its affiliated management companies, R&A Risk Professionals Inc. and TankSpec LLC., as well as tank inspection and monitoring efforts.
Source: AM Best
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