CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK, N.J. - DECEMBER 12, 2013 12:00 AM (EST)
A.M. Best Co. has upgraded the issuer credit rating (ICR) to “a+” from “a” and affirmed the financial strength rating (FSR) of A (Excellent) of Western National Mutual Insurance Company (Edina, MN) and its wholly owned subsidiaries: Western National Assurance Company, Western Home Insurance Company, Pioneer Specialty Insurance Company, Umialik Insurance Company and Arizona Automobile Insurance Company. Collectively, these companies operate under a pooling agreement and are referred to as Western National Insurance Group (Western National). Concurrently, A.M. Best has affirmed the FSR of A (Excellent) and ICR of “a” of Western National’s other subsidiary, American Freedom Insurance Company (American Freedom) (Arlington Heights, IL). The outlook for all ratings is stable.
The ratings and outlook for Western National reflect its solid risk-adjusted capitalization, strong operating performance in recent years and superior business profile, as the group writes a wide variety of personal and commercial line products in 17 states. These positive rating factors are partially offset by Western National’s exposure to frequent and severe weather events as noted in recent years. The ratings and outlook also recognize the group’s performance in comparison to its peer group, as well as A.M. Best’s expectation that trends in operating performance and risk-adjusted capitalization will continue in the near and longer term. Regarding future rating movement, a continuing profitable trend in underwriting performance and positive development in reserving issues would lead to consideration of further upgrading of the ratings.
The ratings for American Freedom recognize its adequate risk-adjusted capitalization, conservative underwriting leverage and favorable loss reserve development in the highly competitive non-standard automobile market. The ratings also reflect the implicit and explicit support provided by Western National since its purchase of American Freedom in April 2012.
These strengths are partially offset by American Freedom’s limited business profile, with its singular product offering and relatively tight geographic concentration. A.M. Best believes the ratings for American Freedom are well positioned at this time. Any consideration of rating movement would depend on the performance by American Freedom’s parent.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process.Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.