OLDWICK, N.J--(BUSINESS WIRE)--A.M. Best Co. has revised the outlook to stable from positive and affirmed the financial strength of B+ (Good) and issuer credit rating of “bbb-“ of Waco Fire and Casualty Insurance Company (Waco) (Norcross, GA).
The revised outlook reflects Waco’s volatile underwriting results, which have led to mixed return measures over a five-year period. Furthermore, premiums are expected to continue to decline over the next two years as the company ceases to write any non-affiliated programs. The current outlook reflects A.M. Best's expectation that despite the variability in operating results, Waco's risk-adjusted capitalization will continue to support its current ratings.
The rating affirmations reflect Waco's strong risk-adjusted capitalization, consistently favorable loss reserve development and overall positive after-tax income over a five-year period. These positive rating factors are partially offset by the company's high expense ratio, narrow geographic and product spread of risk (exposing it to changes in regulatory, legislative and competitive landscapes) and variability in its return measures.
The principal 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. Key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies” and “Understanding BCAR for Property/Casualty Insurers.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.