AM Best Upgrades Credit Ratings of Physicians Mutual Group Members

NOVEMBER 13, 2025 09:40 AM (EST)

AM Best Upgrades Credit Ratings of Physicians Mutual Group Members

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FOR IMMEDIATE RELEASE

OLDWICK - NOVEMBER 13, 2025 09:40 AM (EST)
AM Best has upgraded the Financial Strength Rating to A+ (Superior) from A (Excellent) and the Long-Term Issuer Credit Ratings to "aa-" (Superior) from "a+" (Excellent) of Physicians Mutual Insurance Company and Physicians Life Insurance Company. The outlook of these Credit Ratings (ratings) is stable. The group, collectively referred to as Physicians Mutual Group, is domiciled in Omaha, NE.

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

The rating upgrades reflect Physicians Mutual Group's continued favorable balance sheet metrics, supported by its strongest risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR). The group reported favorable growth of its capital and surplus levels, which was driven by organic earnings and favorable investment returns including unrealized gains. AM Best expects that the group's capital growth will continue in the near term. Physicians Mutual Group's capital position provides support to risks related to insurance and investments on a consolidated basis. AM Best also notes the organization's recent change to a mutual holding company (MHC) structure, and the creation of Physicians Mutual Holding Company. As an MHC, the organization has additional financial flexibility and ability to access further forms of financing should that become necessary.

Furthermore, Physicians Mutual Group has demonstrated strong financial flexibility through its access to Federal Home Loan Bank (FHLB) of Topeka, Kansas with access to over $200 million of borrowing capacity. AM Best notes that FHLB advances under the program are for arbitrage - spread investment - purposes only and operating leverage remains low and within AM Best's guidelines. Physicians Mutual Group also maintains a relatively conservative investment portfolio, which is highly diversified with good credit quality, which has continued over the past several years and through 2025. Invested assets are held predominantly in investment grade fixed income securities and cash/cash equivalents. There is no material exposure to equities, real estate or Schedule BA/alternative assets. The group's investment portfolio is quite liquid and has relatively low risk. AM Best expects that this will be the investment strategy going forward.

AM Best assesses Physicians Mutual Group's operating performance as strong, supported by continued favorable premium growth across a majority of its line of business, which continued through the second quarter of 2025. Earnings results were lower than the previous year's record level; however, it remained favorable. Earnings declined through the second quarter of 2025 and were driven primarily by statutory strain of new Medicare supplement sales. AM Best will continue to monitor the corrective measure put in place by management to return profitability to projected levels. AM Best also notes that while profitability ratios may seem lower, this is impacted by the level of excess capital held in the organization, which depresses these ratios.

The group's business profile assessment is supported by a well-recognized brand position in the Medicare supplement market. Physicians Mutual Group is a long-established provider of health, life and retirement products, serving the senior market primarily in the Midwest, Central and Southeast regions of the United States. In addition, Physicians Mutual Group's competitive position is strengthened through its ability to leverage its diversified distribution channels.

AM Best assesses Physician Mutual Group's ERM program as appropriate for the group's current level of risks. The organization has a formal ERM program with an established governance structure. The program is overseen by the board of directors, management and other personnel, and there is an expansion of its risk culture throughout the organization. Additionally, economic capital modeling is utilized to assess risks and allocate capital based upon these risks and to help support its business decisions.

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 Activityweb 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 (BCR), Best's Performance Assessments (PA), Best's Preliminary Credit Assessments (PCA) 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.