Medmarc's Financial Strength & Stability

The below four cornerstones illustrate why Medmarc is a financially secure company and trusted by companies of all sizes:

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".

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 2008 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 seven-year period ended December 31, 2008, Medmarc has achieved a combined ratio of 100.8 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, adverse loss development for products liability claims has only occurred in two calendar years – 2002 and 2006.

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.

*Loss reserves are an independent actuary’s estimate of the ultimate net value of all unpaid claims at the balance sheet date.

Capital Strength and Liquidity

Low Premium-to-Surplus Leverage: 0.5:1.0.  For each $1.00 of net written premium, Medmarc has $2.00 of policyholder surplus.

Strong Loss Reserves-to-Policyholder Surplus Position.  For each $1.00 of net loss reserves, Medmarc has $0.60 of policyholder surplus.

Strong Assets to Liabilities Position.  For each $1.00 of liabilities, Medmarc has $1.50 of assets.

Conservative Investment Philosophy.

In 2008. 

• The average S&P rating for Medmarc's fixed income portfolio was AA-
• Impairment losses were 0.7% of invested assets
• Subprime investments were 0.4% of invested assets

Medmarc does not invest in derivatives.