AM Best has downgraded the outlook for Society Insurance, a mutual company based in Fond du Lac, Wisconsin, shifting it from stable to negative. At the same time, the credit rating agency confirmed the company’s strong Financial Strength Rating of A- and Long-Term Issuer Credit Rating of “a-,” both considered excellent.
This change comes after Society Insurance faced underwriting losses for five years in a row, with 2023 and 2024 seeing particularly high losses. The company’s combined ratio—a key measure of profitability—has been above the breakeven point for most of the past five years and now exceeds the industry average. These losses were largely driven by a rise in catastrophe events and costly claims.
Society, which offers insurance coverage primarily to businesses like restaurants, bars, gas stations, and cafés, has made some moves to improve its situation. They’ve adjusted premium rates and tightened underwriting, with hopes these steps will help improve results in late 2025 and 2026.
Despite the underwriting challenges, Society maintains a very strong balance sheet. This strength owes much to their solid capital reserves, good liquidity, and a cautious investment approach. The company also recently issued a surplus note to bolster its capital, though this has increased its debt and related costs.
Society’s business benefits from long-term relationships with agencies and endorsements from trade groups. Its focus on specialty markets like commercial insurance means it often faces severe weather events and large claims. The company has also been working to grow beyond Wisconsin, expanding into other states.
AM Best will be watching closely to see if Society’s recent actions lead to more stable underwriting and help rebuild internal capital. For now, the outlook remains cautious, reflecting the ongoing challenges in the insurance market and the company’s efforts to bounce back.