FEBRUARY 01, 2010 12:00 AM (EST)
A.M. Best Revises Outlook to Positive for Ratings of MGA Insurance Company, Inc. and GAINSCO, INC.
Michael T. Venezia
(908) 439-2200, ext. 5034
Jeffrey Mango, CPA
(908) 439-2200, ext. 5204
(908) 439-2200, ext. 5644
(908) 439-2200, ext. 5378
FOR IMMEDIATE RELEASE
OLDWICK, N.J. - FEBRUARY 01, 2010 12:00 AM (EST)
A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating of B (Fair) and issuer credit rating (ICR) of "bb+" of MGA Insurance Company, Inc. (MGA) (Dallas, TX). Concurrently, A.M. Best has revised the outlook to positive from stable and affirmed the ICR of "b" of MGA's publicly traded holding company, GAINSCO, INC. (Dallas, TX) [NYSE Amex: GAN].
These rating actions recognize MGA's enhanced risk-adjusted capitalization and generally profitable operating results during a period of challenging economic conditions. Historically, elevated underwriting leverage was the result of MGA's strategic business development in the personal nonstandard automobile business; however, premium growth has been tempered in recent years.
These rating factors are somewhat offset by MGA's historically unfavorable loss reserve development, although improvement has been seen in recent periods, and its variable underwriting performance.
For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit Best's Ratings & Analysis.
The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at Best's Credit Rating Methodology.
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.