AM Best revises outlook on Society Insurance to negative on underwriting losses

(The Insurer) – Rating agency AM Best has revised its outlook on the Wisconsin-based mutual insurer Society Insurance to negative from stable, citing half a decade of underwriting losses and continued pressure on profitability in 2023 and 2024.

The agency affirmed Society’s financial strength rating of A-minus (Excellent) and long-term issuer credit rating of “a-minus” (Excellent).

However, AM Best highlighted deteriorating performance metrics because of higher catastrophe claims and large loss experience.

The mutual insurer’s combined ratio has exceeded breakeven in four of the past five years and now stands above the industry composite average, AM Best said.

While its loss and loss adjustment expense ratios remain comparable to peers, Society has put corrective measures to narrow the losses. These actions include rate hikes and underwriting changes.

AM Best said the outlook could stabilize if these actions incur improvement in underwriting and capital generation in the remainder of 2025 and early 2026.

According to S&P Capital IQ, Society wrote $293.2 million in direct premiums in 2024, down slightly from $294.2 million the previous year. Its combined ratio worsened to 109.3% last year, from 108.5% in 2023.