A.M. Best Assigns Ratings to MDAdvantage Insurance Company
A.M. Best Co. has assigned a financial strength rating of A- (Excellent) and an issuer credit rating of “a-” to MDAdvantage Insurance Company of New Jersey (MDAdvantage) (Lawrenceville, NJ). The outlook assigned to both ratings is stable.
The ratings recognize MDAdvantage's recent strong operating performance, supportive capital position and favorable reserve development. Additional factors supporting the ratings include MDAdvantage's dedication to loss prevention and risk management, its conservative investment portfolio, commitment to underwriting and claim management principles and its experienced management team, which has an in-depth knowledge of the New Jersey professional liability market.
Partially offsetting these positive rating factors are the risks inherent within the medical professional liability insurance sector including tort reform, price competition and regulatory trends. Given MDAdvantage's relatively brief history as a single line writer in the long-tail medical professional liability line, the company is exposed to the potential for adverse loss experience or the negative effects of an insufficient rate structure.
The outlook is based on the organization's ability to maintain underwriting discipline and produce favorable operating results in the near term.
Performance factors that could lead to positive rating actions include, but are not limited to, MDAdvantage's recording favorable long-term underwriting and operating results throughout insurance market cycles and competitive conditions. The ratings may be impacted negatively by issues such as price competition, upward shifts in claim frequency and severity patterns, or adverse developments in the legal and regulatory environment relating to health care delivery mandates and tort reform measures.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies” and “Understanding BCAR for Property/Casualty Insurers.” Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visitwww.ambest.com.
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