AM Best Upgrades Credit Ratings of Illinois Casualty Company and Lebanon Valley Insurance Company; Affirms Credit Ratings of Remaining Members of Mutual Capital Insurance Group

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has upgraded the Financial Strength Rating (FSR) to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) to “a” (Excellent) from “a-” (Excellent) of Illinois Casualty Company (ICC) and Lebanon Valley Insurance Company (LV). The outlook of these Credit Ratings (ratings) has been revised to stable from positive. ICC and LV are domiciled in Rock Island, IL. Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICRs of “a” (Excellent) of Tuscarora Wayne Insurance Company (TW) and its affiliate, Keystone National Insurance Company. The outlook of these ratings is stable. TW and Keystone National Insurance Company are domiciled in Wyalusing, PA. The aforementioned companies are collectively referred to as Mutual Capital Insurance Group or the group.

The ratings reflect Mutual Capital Insurance Group’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The rating upgrades of ICC and LV follow the recent regulatory approval of the intercompany pooling agreement between TW, LV and ICC, effective July 1, 2026. The rating upgrades are based on AM Best’s expectation that the business profiles of ICC and LV will be enhanced as pooled members of the group.

The group’s balance sheet strength assessment is supported by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), solid liquidity and a conservative investment portfolio. These strengths are offset partially by the group’s inconsistent loss reserve development trends over the past several years. The group’s operating performance reflects historical and prospective trends, which are expected to remain profitable and consistent with this assessment. Underwriting performance, as measured by the pool’s five-year average combined ratio, modestly outperforms the commercial casualty composite. Consolidated results for the pool have been generally stable, with pre-tax operating income reported in each of the past 10 years. The business profile assessment reflects the group’s fairly broad geographic spread while serving its niche markets. The group’s complementary business mix includes a diverse range of products in the personal and commercial lines segments. AM Best considers the group’s ERM program to be appropriate for the risk profile, which includes comprehensive risk management, shared reinsurance protections and centralized executive leadership.

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