AM Best announced 34 upward credit rating actions for U.S. commercial lines insurers in 2024, over 60 percent more than the number registered for 2023, the rating agency reported in its official tally for the year.

Additional upgrades of 8 personal lines insurers brought the U.S. property/casualty insurance industry total to 42 for 2024 compared to 35 in total for 2023, the rating agency said in a report published last week, which totals up all changes to issuer credit ratings, affirmations, and initial ratings along with actions to put ICRs under review.

At the end of the year, total upgrades and downgrades came out about even—42 ICR upgrades and 43 downgrades. But while commercial lines insurers saw almost three-times more upgrades than downgrades (34 vs. 12), the reverse was true for the personal lines segment. In fact, downgrades of personal lines insurers (31) were almost four-times more likely than upgrades (8), figures displayed in the report revealed.

Bottom line: The total number of upgrades went up, while the number downgrades went down compared to the 2023. In total, there were seven more upgrades in 2024 and a dozen fewer downgrades in 2024 than in 2023.

“The underwriting performance and overall reserve development for commercial lines insurers has been consistently solid, with positive pricing momentum and underwriting discipline positioning the segment to navigate the headwinds,” said Helen Andersen, industry research analyst, AM Best, in a statement about the report, explaining why commercial lines insurers scored the bulk of the upgrades.

The majority of the 2024 downgrades were on insurers with property exposures and reflect heightened catastrophe risk exposures, losses from more frequent secondary perils, and elevated reinsurance costs and retentions, AM Best said.

The report states that persistently elevated loss costs in the personal auto segment—driven by more expensive parts in newer vehicles and higher labor costs—also contributed to downgrades.

Generally, weak balance sheets and poor underwriting profitability were key drivers of downgrades, while good operating performance fueled more than 40 percent of the upgrades. In addition, almost one-quarter (23.9 percent) of upgrades came from a “change in rating unit” when an insurer merged with a higher-rated group.

Affirmations were the most common rating action taken across all segments last year, with 566 affirmations representing nearly 78 percent of all actions. But they declined slightly as a proportion of rating actions in 2024 compared with 2023.

The report also tallies outlooks accompanying AM Best’s rating changes. Stable outlooks were indicated for 79 percent of the actions in 2024, compared to 85 percent in 2023. With stable outlooks falling, negative outlooks grew. There were 79 negative outlooks assigned to AM Best ICRs in 2024, representing 12 percent of the outlooks assigned. That compared to 49 negative outlooks in 2023, representing less than 8 percent of the 2023 total outlook assignments.

2025 Actions

According to a list of the 43 downgraded carriers in the report, downgraded insurers ended up with ICR’s ranging from a high of “aa-” for Auto-Owners Insurance Group to a low of “cc” for Casualty Underwriters Insurance Company. Both Auto-Owners and Casualty Underwriters are identified as private passenger auto and homeowners writers on the AM Best list, with the ICR of Auto-Owners falling to “aa” from “aa+” in 2024, while AM Best lowered Casualty Underwriters Insurance to “cc” with a negative outlook from “b.”

A day after AM Best its lists of 2024 upgrades and downgrades, AM Best announced more actions for Casualty Underwriters Insurance Company (CUIC). On March 14, 2025, announced that it downgraded Casualty Underwriters’ financial strength rating to D (poor) from C- (weak) and the Long-Term Issuer Credit Rating to “c” (poor) from “cc” (very weak). Concurrently, AM Best withdrew the ratings, noting that the company requested to no longer participate in AM Best’s interactive rating process.

According to AM Best, the CUIC downgrades “reflected material erosion in CUIC’s capital position, elevated leverage metrics and recent adverse loss reserve development, which have weakened the company’s balance sheet materially.”

“Surplus declines reported in four out of the past five years through 2024, have led to significant erosion in the company’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR),” AM Best added, going on to attribute the weakened capital position to increased volatility in CUIC’s recent underwriting results, persistent rate inadequacy, inflationary pressures and increased severity in bodily injury claims owing to rising medical costs.

According to the CUIC website, the company has been providing personal auto insurance since 1999, and currently writes in Idaho, Kansas, North Dakota, Oklahoma, and Utah through a network of independent insurance agents, offering clients a monthly payment plan with a onetime application fee and easy payments that can be made via direct bill, credit card, monthly direct withdrawal, or at the agent’s offices.

In a separate 2025 rating action announced on the same day the rating agency published its report for the industry, AM Best has placed the “C++” (marginal) financial strength rating and “b” (marginal) long-term ICR of Wolverine Mutual Insurance Company under review with positive implications. AM Best had downgraded Wolverine’s ratings in September last year with a negative outlook. Wolverine writes personal lines in Michigan and Indiana, according the company’s website.

AM Best said its revision of Wolverine’s rating to a positive outlook last week followed an announcement that Wolverine and Clover Financial Corporation signed and filed a sponsored demutualization transaction with the Michigan Department of Insurance and Financial Services, in which Wolverine will become a stock company and Clover will purchase the entire stock of the newly formed company.

“The under review with positive implications status reflects the opportunity for improved balance sheet metrics and operating performance for Wolverine, if it becomes a subsidiary of Clover,” AM Best said, noting that Clover’s parent company, Oakland Financial Corporation, currently owns Cherokee Insurance Company, a Michigan auto insurers with a long-term ICR of “a” (excellent) with a stable outlook.

Earlier 2025 actions involved outlook changes for ratings of Mercury General (to negative) and Westfield (to stable), ratings upgrades for The General (sold by Sentry by American Family), and an affirmation of Church Mutual’s ratings.

Related articles: Notable Rating Actions This Week: Mercury General, Sentry’s The General; Notable Rating Actions This Week: Westfield and Church Mutual

2024 Actions at a High Level

Although not specifically called out in the AM Best report on last year’s rating actions, a Carrier Management review of the upward and downward rating actions in 2024 reveals that the majority of downgrades (more than three-quarters) impacted companies structured as mutuals, reciprocal exchanges or RRGs. Mutuals, however, were involved in less than one-quarter of the 2024 upgrade actions.

Twenty-one out of 33 companies getting initial rating assignments were set up to write commercial lines, while only three fall in the private passenger auto and homeowners industry composite. Others are identified as warranty, reinsurance and surplus lines writers.