OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” to Western Surety Company (WSC) (Regina, Saskatchewan, Canada). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect WSC’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
WSC’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is assessed at the strongest level, reflective of organic surplus growth achieved through adequate operating performance, which has benefited from sustained favorable reserve development patterns. WSC’s balance sheet strength is considered very strong and considers the modestly elevated underwriting leverage measures and limited financial flexibility operating as a privately held insurer.
AM Best assesses WSC’s operating performance as adequate, as evidenced by its average pre-tax return on revenue measures over the recent five- and 10-year timeframe. AM Best views WSC’s business profile assessment as limited as the company operates as a contract and commercial surety writer within Canada. Premiums are diversified on a provincial basis throughout Canada, with the largest concentration of written premiums in British Columbia (24.7%), with most of the balance written in Ontario (20.4%), Alberta (18.9%), Saskatchewan (14.8%) and Manitoba (9.1%). Operating as a monoline surety writer, the company’s limited business profile leaves it susceptible to potential legislative, regulatory or judicial changes occurring within Canada. ERM capabilities are considered appropriate for the company’s risk profile.
While positive rating actions are unlikely over the near term, they could occur over the longer term should operating results improve and be sustained at a level that is in line with higher-rated peers.
Key factors that could trigger negative actions on WSC’s ratings and outlooks include a weakening in underwriting performance to a level that falls short of supporting the adequate operating performance assessment. Negative rating actions could also occur should overall risk-adjusted capitalization decline to a level that is no longer supportive of the ratings.
This press release relates to Credit Ratings that have been published on AM 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 see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2020 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.