AM Best has announced that it is reviewing the financial ratings of Wolverine Mutual Insurance Company, based in Dowagiac, Michigan, and the outlook is positive. The company currently holds a Financial Strength Rating of C++ (Marginal) and a Long-Term Issuer Credit Rating of "b" (Marginal). These ratings reflect Wolverine’s weak balance sheet strength and limited operating performance.
The review comes after Wolverine and Clover Financial Corporation signed a deal to demutualize, meaning Wolverine will change from a mutual company to a stock company. Clover plans to buy all of Wolverine’s stock, making it a wholly owned subsidiary. This move could improve Wolverine’s financial standing and performance, especially since Clover’s parent company, Oakland Financial Corporation, owns Cherokee Insurance Company, which has a strong rating of "a" (Excellent) with a stable outlook.
Wolverine and Cherokee have also entered into an agreement where Cherokee will take on 25% of Wolverine’s personal lines of business starting January 1, 2025. Cherokee is known for its solid performance in auto insurance in Michigan.
AM Best expects the transaction to close in the second quarter of 2025, pending regulatory approvals. The ratings will remain under review until the deal is finalized and AM Best can assess Clover’s plans for Wolverine. This development signals potential growth and stability for Wolverine in the near future.