A.M. Best Affirms Ratings of Western Financial Insurance Company

OLDWICK, N.J.--()--A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit ratings of “a-” of Western Financial Insurance Company (WFIC) (Winnipeg, MB, Canada). The outlook for all ratings is stable. Western Financial Group, Inc., the parent of WFIC, is ultimately owned by the Desjardins Financial Group (Desjardins).

The ratings of WFIC are reflective of the company’s consistently strong operating results for relatively low-risk business. WFIC’s risk-adjusted capital remains good even though it has been diminished somewhat by a significant dividend paid in the fourth quarter of 2014, which approximated 20% of prior-year equity. The ratings also reflect the financial flexibility and support provided by its ultimate parent company, Desjardins.

These positive rating factors are partially offset by WFIC’s elevated level of underwriting expenses. In addition, although the company does have a strong presence in the pet insurance market segment, it has somewhat of a limited business profile as a monoline writer in a niche market that is seeing increased competition.

WFIC could realize positive rating movement in the near to midterm if it continues its consistently favorable earnings trend that outperforms peers, while maintaining strong risk-adjusted capitalization. However, the ratings may come under negative pressure if an unfavorable earnings trend develops, WFIC’s capital erodes, or should Desjardins’ financial strength deteriorate.

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.

Key insurance criteria reports utilized:

  • Evaluating Non-Insurance Ultimate Parents
  • Rating Members of Insurance Groups
  • Risk Management and the Rating Process for Insurance Companies
  • Understanding BCAR for Canadian Property and Casualty Insurers

This press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best’s Ratings & Criteria Center.

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 © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contacts

A.M. Best
Joel Silverthorn, 908-439-2200, ext. 5120
Senior Financial Analyst
joel.silverthorn@ambest.com
or
Greg Williams, 908-439-2200, ext. 5815
Assistant Vice President
greg.williams@ambest.com
or
Christopher Sharkey, 908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Contacts

A.M. Best
Joel Silverthorn, 908-439-2200, ext. 5120
Senior Financial Analyst
joel.silverthorn@ambest.com
or
Greg Williams, 908-439-2200, ext. 5815
Assistant Vice President
greg.williams@ambest.com
or
Christopher Sharkey, 908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com