AM Best Assigns Credit Ratings to Care West Insurance Company

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 Care West Insurance Company (Care West) (Rocklin, CA). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect Care West’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.

Care West’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is categorized as strongest, and AM Best expects it to remain at a similar level in future years. The balance sheet strength assessment also considers the company’s high quality reinsurance panel, conservative investment portfolio and historically redundant reserves.

Care West has generated an adequate level of operating performance with five-year operating metrics outperforming the workers’ compensation (WC) composite. The company’s recent five-year results have improved significantly compared with its performance during the previous five-year period (2010 to 2014), with certain ten-year metrics moderately underperforming the composite. The improvement in operating performance demonstrates the effectiveness of corrective actions that senior management undertook beginning in 2009. Care West has limited business diversification as a mono-line WC insurer with geographic concentration. The company is licensed in California and Nevada; however, California accounts for over 99% of its total premiums. This leaves Care West susceptible to potential judicial, legislative or regulatory changes in the WC market within California. Risk-management capabilities are considered appropriate for the company’s risk profile.

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.

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