AM Best turns positive on Merchants Bonding outlook

By AI, Created 5:01 PM UTC, June 04, 2026, /AGP/ – AM Best revised the outlook for Merchants Bonding Company and Merchants National Bonding to positive from stable while affirming their A (Excellent) financial strength rating and a+ long-term issuer credit rating. The move points to continued balance-sheet strength, profitable underwriting and a strong liquidity position.

Why it matters: - The outlook upgrade signals AM Best sees Merchants Bonding as better positioned for continued financial strength. - The affirmation of the A (Excellent) rating keeps the surety carrier among the stronger-rated firms in its market. - The change may matter to customers, agents and business partners that rely on surety capacity and claims-paying ability.

What happened: - AM Best revised the outlooks for Merchants Bonding Company (Mutual) and Merchants National Bonding, Inc. to positive from stable. - AM Best affirmed the companies’ A (Excellent) Financial Strength Rating and a+ (Excellent) Long-Term Issuer Credit Rating. - Merchants Bonding announced the rating action on June 4, 2026.

The details: - AM Best said the ratings reflect Merchants Bonding’s balance sheet strength, which it assessed as strongest. - AM Best also pointed to strong operating performance, a neutral business profile and appropriate enterprise risk management. - The positive outlook reflects consistent surplus growth, disciplined underwriting results and a high-quality investment portfolio. - AM Best cited favorable loss reserve development and a solid liquidity position. - Positive underwriting and operating cash flows supported the liquidity view. - AM Best also cited consistently profitable underwriting performance. - The rating agency noted Merchants Bonding’s geographic diversification across all 50 states and the District of Columbia. - AM Best pointed to continued investment in technology, including enterprise AI capabilities. - AM Best also highlighted selective underwriting practices and a strong reinsurance program. - Elisabeth Sandersfeld, CFO, CRO, Corporate Secretary & Treasurer of Merchants Bonding, said the recognition reflects the strength of the balance sheet and the company’s underwriting discipline and long-term commitment to responsible growth. - Sandersfeld said the positive outlook affirms the company’s strategic priorities and its focus on long-term value for stakeholders. - Sandersfeld said AM Best recognizes the company’s financial strength and performance tied to its common-sense solutions and first-class experiences.

Between the lines: - The outlook change is more important than a rating upgrade, but it still suggests AM Best sees momentum in Merchants Bonding’s financial profile. - The mention of enterprise AI capabilities shows the company is tying technology investment to its long-term operating strategy. - The combination of surplus growth, reserve development and reinsurance support suggests the company is managing both earnings quality and risk.

What’s next: - Merchants Bonding will likely use the positive outlook to reinforce its standing with agents, customers and reinsurers. - Future AM Best reviews will show whether the company converts the positive outlook into an improved credit rating. - Merchants Bonding says it will keep focusing on responsible growth and stakeholder value.

The bottom line: - AM Best is signaling confidence in Merchants Bonding’s balance sheet, underwriting and liquidity, while stopping short of a rating upgrade.