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AM Best Revises Issuer Credit Rating Outlooks to Negative for Members of Grinnell Mutual Group

AM Best has revised the outlooks to negative from stable for the Long-Term Issuer Credit Ratings (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) for the members of Grinnell Mutual Group (Grinnell). The outlook of the FSR is stable. (See below for a listing of companies.)

The Credit Ratings (ratings) reflect Grinnell’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The revised outlooks to negative from stable of the Long-Term ICRs consider a deviation in Grinnell’s operating results in more recent years primarily resulting from an abnormal level of catastrophe losses in core operating states along with increased severity of loss due to inflation. Results in 2022 were driven by an increase in both frequency and severity of losses specifically in Grinnell’s assumed reinsurance book. The commercial profit center saw relative stable frequency; however, severity of claims nearly doubled. Through the first half of 2023, the results continue to be driven by the assumed reinsurance book of business, which has deviated significantly from projections due to an increase in weather events and a significant increase in Grinnell’s reinsurance retention with minimal loss recoveries. Direct lines of business are moderately above plan and continue to pressure the group’s operating performance. Consequently, Grinnell has seen a combined ratio above break even in each of the past four years, with the combined ratio climbing higher year over year.

Grinnell’s management team has implemented initiatives to help mitigate volatility, which includes significant rate action and inflation guard adjustments. Grinnell will continue to refine underwriting standards and plans to reevaluate all policies and exposures. AM Best expects these actions to help Grinnell improve upon its current level of operating performance, however, given the absence of sustained improvements, the ratings are likely to be downgraded.

The FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) have been affirmed with the outlooks of the Long-Term ICRs revised to negative from stable while the outlook of the FSR is stable, for the following members of Grinnell Mutual Group:

  • Grinnell Mutual Reinsurance Company
  • Grinnell Select Reinsurance Company
  • Grinnell Compass, Inc.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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