Press Release - OCTOBER 25, 2011

A.M. Best Affirms Ratings of W. R. Berkley Corporation and Its Subsidiaries

David Blades, CPCU—P/C
Senior Financial Analyst
(908) 439-2200, ext. 5422

Jeffrey Lane—L/H
Managing Senior Financial Analyst
(908) 439-2200, ext. 5567

Carole Lovell
Public Relations Associate
(908) 439-2200, ext. 5445

Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644


OLDWICK, N.J. - OCTOBER 25, 2011
A.M. Best Co. has affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit ratings (ICR) of "aa-" of Berkley Insurance Group (Berkley Insurance), Admiral Insurance Group (Admiral), Berkley Regional Group (Berkley Regional) and Nautilus Insurance Group (Nautilus) and their respective property/casualty members.

A.M. Best also has affirmed the FSR of A+ (Superior) and ICR of "aa-" of Berkley Life and Health Insurance Company (Berkley Life and Health) (Urbandale, IA).

Concurrently, A.M. Best has affirmed the ICR and debt ratings of "a-" on senior unsecured notes and "bbb" on trust preferred securities of the parent company, W. R. Berkley Corporation (W. R. Berkley) (Greenwich, CT) [NYSE: WRB]. The outlook for all ratings is stable. (See link below for a detailed list of the companies and ratings.)

The rating affirmations for Berkley Insurance and Berkley Regional reflect the well-established market profile, historically favorable underwriting and operating performance, solid capitalization, strong operating cash flow and the considerable business diversification of both. The below average catastrophe exposure of both groups and their moderate risk profiles were significant rating considerations as well.

A.M. Best believes the excellent performances of Berkley Insurance and Berkley Regional are largely owed to their successfully executed, well-developed business strategies, which feature individual operating units focused on specific niche markets, primarily defined by geography and product orientation. Their demonstrated market expertise has led to favorable operating results, which has helped foster long-term stability and ultimately has resulted in their above average retentions. Based on these factors, A.M. Best believes these favorable operating results will continue, as both groups maintain their established market positions despite persisting competitive pressures.

Partially offsetting these positive rating factors is the effects of the continued soft market, weak macro economic conditions, falling investment yields and above-average net underwriting leverages at both groups. However, the consistent generation of profitable operating results has helped mitigate these negative factors. Both groups have reported significant favorable development on reserves for recent accident years, despite experiencing some, albeit lessening, adverse loss reserve developments in some older accident years.

The rating affirmations of Admiral and Nautilus recognize the highly profitable underwriting and operating performance, strong capitalization, excellent operating cash flow and demonstrated expertise in the surplus lines market of each group.

Partially offsetting these positive risk factors is the effects of soft market conditions, weak economic growth, low new money yields as well as Admiral and Nautilus' slightly above-average underwriting leverages and the modest adverse development of older accident years' reserves, at Admiral.

The ratings of all the affiliated property/casualty groups consider the role and strategic importance of each within the W. R. Berkley organization. As such, A.M. Best views these groups as core business units of W. R. Berkley, which are afforded implicit and explicit support by the parent.

The affirmation of the ratings for Berkley Life and Health acknowledges its continued favorable risk-adjusted capital position, which is expected to support the company's growing business going forward and the financial and operational support of W. R. Berkley. Berkley Life and Health is strategic in W. R. Berkley's expansion in the accident and health market, primarily medical stop-loss coverage.

W. R. Berkley's ICR and debt ratings recognize A.M. Best's view that the organization's substantial financial flexibility has been evidenced by its ability to access capital markets and maintain investor interest.

While W. R. Berkley has historically maintained above average financial leverage, strong earnings have fueled the improved capital levels of its subsidiaries and led to the company's debt-to-total capital trending lower over the last several years. However, its leverage has remained above that of industry peers.

At June 30, 2011, W. R. Berkley's unadjusted debt-to-capital (including trust preferred securities) stood at 31%, just over the midpoint of its stated target range for financial leverage of 25% to 35%. While weather-related losses suffered during the first three quarters of 2011 and the persisting competitive property/casualty operating environment is still likely to place some pressure on 2011 underwriting results, W. R. Berkley's earnings are expected to remain solid and both its cash coverage ratios and its financial leverage, should remain supportive of its ratings. A.M. Best will continue to closely monitor both measures, particularly financial leverage, to ensure that all remain in line with A.M. Best's expectations, and more importantly, continue to support the ratings.

For a complete listing of W. R. Berkley Corporation and its subsidiaries' FSRs, ICRs and debt ratings, please visit W. R. Berkley Corporation.

The principal methodology used in determining these ratings is Best's Credit Rating Methodology - Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best's rating process and highlights the different rating criteria employed. Additional key criteria utilized include: "Risk Management and the Rating Process for Insurance Companies"; "Rating Health Insurance Companies"; "BCAR for Life and Health Insurers"; "Understanding BCAR for Property/Casualty Insurers"; "Catastrophe Risk Management Incorporated Within the Rating Analysis"; "Natural Catastrophe Stress Test Methodology"; "Assessing Country Risk"; A.M. Best's Ratings & the Treatment of Debt; "Understanding Universal BCAR"; and "Rating Members of Insurance Groups." Methodologies can be found at

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.

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