Medmarc's Financial Strength & Stability
Since 1979, leading medical technology and life sciences companies have confidently relied upon Medmarc’s financial strength as the backstop for meeting their products liability insurance protection needs. The below information illustrates why Medmarc is a financially secure company and trusted by companies of all sizes, including the member companies represented on our Board of Directors:
| Capintec, Inc. |
Loma Linda University Medical Center |
| Kol Bio-Medical Instruments, Inc. |
Thermo Fisher Scientific, Inc. |
A.M. Best Rating
A. M. Best Rating of A- (Excellent) With Stable Outlook.
A.M. Best is the nation’s leading independent insurance rating agency. According to Best, an A- (Excellent) rated company has "an excellent ability to meet their ongoing responsibilities to policyholders". The stable outlook indicates "that [the company] is experiencing stable financial and market trends, and that there is a low likelihood that its rating will change in the near-term".
During 2009, Medmarc grew surplus by 13% to its highest level in the Company’s history.
Best's Capital Adequacy Ratio (BCAR). Best's Capital Adequacy Ratio (BCAR) compares A. M. Best’s estimate of the capital necessary to support an insurer’s investment, credit and underwriting risks to the insurer’s economic surplus. Medmarc’s 2009 BCAR exceeds A. M. Best’s published minimum level for companies rated A++ (Superior).
Conservative Risk Management Philosophy
Underwriting. A mutual company, Medmarc targets a combined ratio of 100 as the best measure of pricing equity for its policyholders. For the eight-year period ended December 31, 2009, Medmarc has achieved a combined ratio of 101.3 for its products liability line of business.
Loss Reserves*. It is very important for loss reserves to make prudent provision for the possibility of severe claims. Since 1986, Medmarc has experienced favorable development of its products liability loss reserves in 22 out of 24 years.
Quality Reinsurance Partners. Medmarc is backstopped by reinsurers selected for their financial strength and capital size. Each is rated A (Excellent), or better by A.M. Best and in a Financial Size Category of XIV or higher.
The combined policyholder surplus of Medmarc's reinsurers as of December 31, 2009 exceeded $10 billion.
*Loss reserves are an estimate of the ultimate net value of all unpaid claims at the balance sheet date.
Capital Strength and Liquidity
Low Premium-to-Surplus Leverage: 0.3:1.0. For each $1.00 of net written premium, Medmarc has $3.00 of policyholder surplus.
Strong Loss Reserves-to-Policyholder Surplus Position. For each $1.00 of net loss reserves, Medmarc has an additional $0.70 of policyholder surplus.
Strong Current Liquidity Position. For each $1.00 of liabilities, Medmarc has $1.37 of unencumbered cash and affiliated investments.
Conservative Investment Philosophy.
As of December 31, 2009.
- The average S&P rating for Medmarc's fixed income portfolio was AA-
- No subprime investments are held
- No investments are other-than-temporarily impaired
- Medmarc does not invest in derivatives