AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Oswego County Mutual Insurance Company (Oswego) (Parish, NY).

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

The positive outlooks reflect Oswego’s consistently favorable operating performance over the most recent five-year period, driven by five consecutive years of increasingly profitable underwriting performance supplemented by rising investment income. The profitable underwriting results, as evidenced by a five-year average combined ratio that compares favorably to the commercial property composite, are reflective of strong underwriting measures, adequate pricing and the company’s long-standing local market presence. These factors are enhanced further by the company’s five-year average pure loss and loss adjustment expense ratio, which outperforms the composite average by a wide margin.

Partially offsetting these positive factors are the company’s elevated common stock leverage, underwriting expense measures and geographic concentration in New York. This single-state concentration exposes the company to competitive market conditions, potentially adverse judicial decisions and regulatory actions. Although the company is exposed to frequent and severe weather-related events, this risk is mitigated by a comprehensive reinsurance program backed by highly rated reinsurers that reduce the probable maximum loss from a one-in-100-hundred-year event to a modest amount of policyholders’ surplus.

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