AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of Upland Mutual Insurance, Inc. (Upland) (Junction City, KS).

The Credit Ratings (ratings) reflect Upland’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The revised outlooks to positive from stable reflect Upland’s continued strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and continued improvement in Upland’s balance sheet metrics to a level that aligns with higher-rated balance sheets. Upland has continued to bolster surplus levels, while simultaneously maintaining low and underwriting leverage measures. Underwriting leverage measures continue to compare very favorably with the personal property composite averages. Upland has produced additions to surplus in nine of the past 10 years, with 2022 being the only exception due to unrealized losses and market volatility. Additions to surplus have occurred despite paying down Federal Home Loan Bank (FHLB) debt over the past five years and maintaining principal balances in its investment portfolio. A portion of the FHLB balances were paid in 2023, while Upland simultaneously added 6% to its surplus. In 2024, more than half the outstanding debts were paid off as they came due leaving only a nominal amount of debt to be paid in 2025 and 2026 as the loans mature. While interest coverage measures have varied year to year based on profitability and frequency/severity of weather events, financial leverage has continued to improve as debt has been paid. Lastly, Upland maintains favorable reserve development in each of the past 10 calendar and accident years and low reserve leverage measures that continue to compare favorably with the composite despite inflation pressures.

The limited business profile reflects the company’s geographic concentration within Kansas, despite doing business throughout the entire state. An appropriate ERM program is maintained through risk appetite and tolerance statements with risk management capabilities appropriately aligned with the concentrated risk profile.

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