Press Release - OCTOBER 24, 2013
A.M. Best Upgrades Ratings of Western Mutual Insurance Pools Members
Michael T. Venezia
Senior Financial Analyst
(908) 439-2200, ext. 5034
Assistant Vice President
(908) 439-2200, ext. 5665
Senior Manager, Public Relations
(908) 439-2200, ext. 5378
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644
FOR IMMEDIATE RELEASE
OLDWICK, N.J. - OCTOBER 24, 2013
A.M. Best Co. has upgraded the financial strength rating to A+ (Superior) from A (Excellent) and the issuer credit ratings to aa- from a+ of Western Mutual Insurance Pools members, Western Mutual Insurance Company, Residence Mutual Insurance Company and Arizona Home Insurance Company (Phoenix, AZ) (collectively referred to as Western Mutual). All companies are domiciled in Irvine, CA, unless otherwise specified. The outlook for all ratings has been revised to stable from positive.
The rating upgrades reflect Western Mutuals superior risk-adjusted capitalization, historical underwriting profitability and declining underwriting leverage trend in recent years. The ratings also recognize that the group is able to employ multiple distribution channels to market its products. Besides brokers and independent agents, Western Mutual also is able to leverage its strong products and marketing efforts to facilitate steady growth of its direct business of homeowners insurance.
These strengths are partially offset by Western Mutuals concentration of business in California, which exposes earnings and surplus to volatility from changes in that states regulatory and judicial climate, competitive and economic conditions as well as catastrophe risks.
Factors that could lead to rating downgrades for Western Mutual or a revision of the outlook to negative include unfavorable operating profitability trends; outsized catastrophe or investment losses relative to expectations and peers; significant adverse loss reserve development; and/or a material decline in risk-adjusted capital.
The methodology used in determining these ratings is Bests Credit Rating Methodology, which provides a comprehensive explanation of A.M. Bests rating process and contains the different rating criteria employed in the rating process. Bests Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
A.M. Best Company is the worlds oldest and most authoritative insurance rating and information source.