AM Best Revises Issuer Credit Rating Outlook to Positive for Insurance Company of the West and Its Subsidiaries

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlook to positive from stable for the Long-Term Issuer Credit Ratings (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term ICRs of “a” (Excellent) of Insurance Company of the West (headquartered in San Diego, CA) and its pooled subsidiaries, collectively referred to as ICW group. (See below for a detailed listing of subsidiaries.) The outlook of the FSR is stable.

The Credit Ratings (ratings) reflect ICW group’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

The revised Long-Term ICR outlook to positive reflects recent strategic initiatives that have enhanced the group’s business profile as a result of management’s focus on product and geographic diversification, pricing sophistication and data analytics to better manage risk exposures. Continued enhancement of the group’s business profile derived from initiatives that contribute to profitable growth could result in an upgrade of the Long-Term ICR over the intermediate term. The positive Long-Term ICR outlook considers AM Best’s expectation that ICW group will continue demonstrating strong operating performance while maintaining risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR).

The expansion of ICW group’s assumed reinsurance business in recent years, together with growth of the group’s workers’ compensation (WC) business outside of California, has resulted in a business profile that is more diversified geographically and by product. This is offset partially by potential execution risks associated with growth in the assumed reinsurance business. In addition, despite its strong position in California’s WC market, ICW group’s WC business remains concentrated in California, subjecting the group to the regulatory, judicial and economic environment of the state and its highly competitive market conditions.

The Long-Term ICR outlook has been revised to positive from stable, while the FSR of A (Excellent) and the Long-Term ICRs of “a” (Excellent) have been affirmed, with a stable outlook for the FSR for the following pooled subsidiaries of Insurance Company of the West.:

• Explorer Insurance Company
• ICW Casualty Insurance Company
• ICW National Insurance Company
• ICW Premier Insurance Company
• VerTerra Insurance Company

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 use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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