A.M. Best Upgrades Ratings of American Underwriters Insurance Company.

OLDWICK, N.J. -- A.M. Best Co. has upgraded the financial strength rating (FSR) to B (Fair) from B- (Fair) and the issuer credit rating (ICR) to "bb+" from "bb-" of the American Underwriters Insurance Company (AUIC) (Conway, AR). The outlook for both ratings is stable.

The upgrades reflect the results of management's initiatives to improve its underwriting performance along with the company's conservative investment portfolio. These initiatives have improved underwriting and operating performance and stabilized risk-adjusted capitalization.

While performance and capitalization have improved in recent years, the ratings continue to reflect AUIC's modest capitalization, historically poor underwriting and operating performance and AUIC's limited business profile.

The rating outlook is based on A.M. Best's expectation that improved operating results will continue to add to surplus in the medium term.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.