A.M. Best Co. has revised the outlook to negative from stable and affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of Minnesota Lawyers Mutual Insurance Company (MLM) (Minneapolis, MN). The ratings are reflective of MLM’s excellent capitalization, overall favorable operating performance and good geographic spread of risk. MLM’s positive rating factors are derived from its focus and commitment to the members of the legal profession, which has led to its high policyholder retention levels. The company also benefits from its excellent service, knowledge of the legal environment, longevity in the market and the payment of dividends to members during profitable periods. Although MLM continues to experience price competition and has exited various states in recent years, MLM has generally maintained earned premium levels while conservatively growing its insured base. These positive rating factors are partially offset by MLM’s product concentration, the exhibited volatility in its results over the last several years, the deterioration in its underwriting and operating performance and the execution risk associated with the company’s underwriting initiatives put in place in recent years to return to profitability. While MLM’s underwriting performance had consistently outperformed the commercial casualty industry composite and the company’s lawyer professional liability peers through 2006, results began to decline in the latter part of 2007. Higher claim frequencies, increased claim severities and adverse prior year loss reserve development all contributed to this deterioration. Management has implemented a number of initiatives designed to combat this trend and favorably influence MLM’s financial performance over the near term. The company has initiated base rate increases and real estate area of practice surcharges, reduced high hazard practices and improved systems. It also exited certain geographic locations where performance had not met the company’s expectations. In 2011, further actions included an interim rate plan to boost premium adequacy and the implementation of a new rating model focused more on the higher risk areas of practice.