-AM Best brightens Waco Fire and Casualty Insurance's outlook.
BANKING AND CREDIT NEWS-November 5, 2010--AM Best brightens Waco Fire and Casualty Insurance's outlook(C)2010 M2 COMMUNICATIONS http://www.m2.com
5 November 2010 - AM Best has upgraded to "positive" from "stable" the outlook on the B+ (good) financial strength rating and "bbb-" issuer credit rating of US Waco Fire and Casualty Insurance Co.
The "positive" outlook reflects Waco's improved risk-adjusted capital position and AM Best's expectations for greater stability in premium levels and cash flows as the run off of a discontinued book of affiliated business nears completion, the agency explained.
The run-off book of business was written on a retrospective rating basis, which resulted in fluctuations in premium volumes and, consequently, variability in operating earnings and negative operating cash flows. Large retro premiums are no longer expected, resulting in less volatile premium levels and a return to positive cash flow generation.
The ratings reflect Waco's strong risk-adjusted capitalisation, low underwriting leverage and conservative loss reserve position, as evidenced by continued favorable loss reserve development over the prior nine accident years, AM Best added.
The positive rating factors are partially offset by Waco's variable operating performance in recent years, narrow geographic and product spread of risk and modestly elevated common stock leverage, the analysts noted.
Waco, a subsidiary of Watkins Associated Industries Inc, is principally engaged in providing insurance coverages to associated entities, including commercial auto liability, auto physical damage, cargo, employment practices liability, general liability, bobtail and renters' insurance.
In addition, through its relationship with a managing general agency, Waco has provided private passenger auto coverage to non-standard clients within Georgia since 2007.
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|Publication:||M2 Banking & Credit News (BCN)|
|Date:||Nov 5, 2010|
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