AM Best Information Services

MAY 12, 2008 12:00 AM (EDT)

A.M. Best Upgrades Ratings of Workers Compensation Fund

Edward Keane
(908) 439-2200, ext. 5291

Michelle Baurkot
(908) 439-2200, ext. 5507
Public Relations
Jim Peavy
(908) 439-2200, ext. 5644

Rachelle Morrow
(908) 439-2200, ext. 5378


OLDWICK, N.J. - MAY 12, 2008 12:00 AM (EDT)
A.M. Best Co. has upgraded the financial strength rating (FSR) to A (Excellent) from A- (Excellent) and issuer credit rating (ICR) to "a" from "a-" for Workers Compensation Fund (WCF) (Salt Lake City, UT). The outlook for both ratings is stable.

The ratings reflect WCF's superior capitalization, strong operating performance and dominant position in the Utah workers' compensation market. The ratings further acknowledge the company's experienced management team, unparalleled local presence and excellent reputation among Utah policyholders for its high level of service and profit sharing.

These positive attributes are driven by WCF's adherence to sound underwriting principles, aggressive claims management, effective loss control services and conservative investment guidelines. Although WCF serves as the guaranteed market for workers' compensation in Utah, its overall operating performance continues to outperform the workers' compensation industry composite by a considerable margin. As the insurer of last resort in Utah, WCF benefits from its ability to utilize multiple pricing tiers and exemption from federal income taxes.

These positive factors are somewhat offset by WCF's business concentration risk, operating as a monoline workers' compensation insurer with limited geographic spread, which exposes its operations to changes in local regulatory, economic and competitive environments. However, this concern has been somewhat mitigated through multi-state fronting arrangements, which allow the company to distribute its products to Utah domiciled insureds with out-of-state operations.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit Best's Rating Center.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit

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AMB# Company Name
003482 WCF Mutual Insurance Company