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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MAY 08, 2006 12:00 AM (EDT)
A.M. Best Co. has upgraded the financial strength rating (FSR) to B+ (Very Good) from B (Fair) of The Union Labor Life Insurance Company (Union Labor Life) (Baltimore, MD). The rating outlook is stable. Additionally, A.M. Best has upgraded the FSR to B (Fair) from B- (Fair) of Ulico Casualty Company (Ulico Casualty) (Washington, DC) and revised the outlook to positive from negative. A.M. Best has also affirmed the FSR of B- (Fair) of the run-off entity, Ulico Standard of America Casualty Company (Ulico Standard) (Delaware). The outlook for this rating remains negative. All companies are subsidiaries of ULLICO Inc. (Wilmington, DE).
The rating upgrade of Union Labor Life reflects substantial improvement in a number of key areas that have resulted in improved overall loss ratios, balance sheet strength and reduced higher risk invested holdings. Union Labor Life's commitment to strengthening its financial condition continues as evidenced by its 2005 positive operating results. In addition, the organization has all but eliminated its investments in historically speculative limited partnerships, with the very modest amounts remaining now held at the holding company level.
The divestiture of various blocks of business, several non-core subsidiaries and a sizeable portion of their limited partnership holdings has enabled the group to strengthen its balance sheet and improve its liquidity considerably. Union Labor Life now maintains a more appropriate risk-adjusted capital position for its level of insurance and investment risks. Furthermore, 2005 results are encouraging as the company has reported its second straight year of operating profits. However, additional time will be needed to see the outcome of proposed product and business line changes currently being implemented.
A.M. Best will continue to monitor Union Labor Life's ability to grow organically and sustain its capitalization, as well as maintain a profitable growth trend in its core business segments. The company also faces increasing competition in the core Taft-Hartley market.
The rating upgrade of Ulico Casualty reflects its improving performance and capitalization. The rating affirmation of Ulico Standard, which is now in run-off, is based on its maintenance of sufficient capital to pay reported loss and loss adjustment expenses that arise from business written in prior years.
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