OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has upgraded the Financial Strength Rating (FSR) to A- (Excellent) from B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “a-” from “bbb” of Repwest Insurance Company (Repwest) (Phoenix, AZ). The outlook of the Long-Term ICR has been revised to stable from positive while the FSR outlook remains stable. Repwest is a wholly owned subsidiary of AMERCO [NASDAQ: UHAL], a publicly traded holding company that is also the parent of U-Haul International, Inc. (U-Haul).
The ratings reflect Repwest’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
These rating actions reflect Repwest’s continued progress in restoring its balance sheet and risk-adjusted capital and the long-standing improvements in operating performance. Prior to the turnaround, Repwest results were adversely impacted by non-core lines of business, including excess workers’ compensation, but these lines have since been discontinued and in runoff. Since then, Repwest has produced consistently favorable results, contributing to a combined ratio that outperforms the industry composite. The company’s elevated underwriting expense ratio is purely a function of its high commission expense paid to an affiliate agency.
Negative ration action could occur if there is a significant erosion of Repwest’s capital base due to deterioration in underwriting performance. While unlikely in the near term, positive rating action could occur if underwriting results continue to stabilize and improve capitalization.
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