OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and issuer credit rating of “a” of Heritage Indemnity Company (Heritage) (Irvine, CA). The outlook for both ratings is stable.
The ratings of Heritage reflect its strong capitalization, favorable operating results and national geographic diversification. The company’s operations are enhanced by the financial flexibility provided Heritage through its ultimate parent, Wells Fargo & Company.
Partly offsetting these positive rating factors are Heritage’s narrow auto warranty product focus and its recent trend of declining operating performance, driven by increased losses associated with a specific warranty program (since eliminated) and higher underwriting expenses due to an increase in corporate expense allocations.
Heritage writes vehicle service contract coverage throughout the United States, including the District of Columbia.
Negative rating actions may occur if Heritage experiences a sudden, unexpected and material decline in its risk-adjusted capitalization, a sustained deterioration in its operating performance or diminished liquidity measures.
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.
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