Mid-Continent Insurance Co., a Somerset, Pa.-based insurer, had its ratings downgraded after posting “sizeable” underwriting losses in 2007 and 2008, according to A.M. Best Co.

The ratings service downgraded the financial strength rating to B++ (Good) from A- (Excellent) and issuer credit rating to “bbb” from “a-.” Mid-Continent’s outlook was revised to negative from stable.

The ratings service said the rating actions follow Mid-Continent’s significant loss reserve strengthening that occurred in 2007 and 2008 to address continued adverse reserve development, which was the main contributor of sizeable underwriting losses in each of the past two years.

Various actions recently have been taken by management regarding claims handling, reserving procedures and underwriting initiatives, in response to improving the loss reserving position and underwriting profitability, according to A.M. Best.

“However, uncertainty still exists regarding the long-term effectiveness of these initiatives, resulting in the assignment of a negative outlook,” the ratings service said in a statement.

Partially offsetting these negative rating factors are Mid-Continent’s moderate underwriting leverage measures, adequate risk-adjusted capitalization and well established market presence with its long-term agency relationships, A.M. Best said.