Calabasas, Calif.-based Western General Insurance Co.’s issuer credit rating has been downgraded by A.M. Best Co. to “bbb” from “bbb+”
A.M. Best also affirmed the financial strength rating (FSR) of B++ (Good). The outlook for the ICR is negative, while the outlook for the FSR has been revised to negative from stable.
The rating actions and outlook reflect Western General’s unprofitable underwriting performance and its vulnerability to weak economic and market conditions in its principal California operating territory, the ratings firm stated. Also reflected in the ratings is the “uncertainty in returning to profitable operating results, despite management’s strategic initiatives to adjust rates, expand its profitable lines of business, eliminate under-performing programs and continue to enhance technology,” the ratings firm stated.
Despite the negative ratings Western General’s risk-adjusted capitalization remains solid, driven by low underwriting leverage measures stemming from the significant decline in its written premiums in prior periods, A.M. Best stated.
Western General’s conservative investment strategy has generally produced a steady stream of net investment income, the ratings agency added.
Aside from non-standard private passenger automobile insurance, Western General offers a commercial automobile insurance program for auto dealers, and is a provider of collateral protection insurance to independent finance companies.
Was this article valuable?
Here are more articles you may enjoy.