Oldwick, NJ -(BusinessWire)- AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” (Excellent) of West Bend Mutual Insurance Company (West Bend) (West Bend, WI).
The Credit Ratings (ratings) reflect West Bend’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The positive outlooks for West Bend reflect its improved operating performance results supported by management’s focus on underwriting discipline, rate adjustments and strategic initiatives to limit volatility in the results. As a result, the company’s five- and 10-year average combined ratios outperformed AM Best’s commercial casualty composite. A steady combination of both favorable underwriting and net investment income has driven profitability for the company, which also led to solid pre-tax operating gains. In addition, overall operating results have benefited from both realized and unrealized capital gains, which have contributed to surplus appreciation over the last five years, with double-digit appreciation being seen in the past two years. West Bend has implemented a number of management initiatives to limit narcotic-related claims costs and litigation expenses, to the latter of which has involved pushing non-litigated bodily injury filings to an early resolution to improve workers compensation results. Lastly, due to several underwriting and claims initiatives, coupled with enhanced exposure and risk management initiatives, West Bend was able to produce profitable results in 2020 despite incurring the company’s largest weather event from Iowa derechos in August 2020.
AM Best expects the company’s operating performance to remain favorable over the near term and continue to bolster its balance sheet strength. The company’s business profile is neutral as it is a super-regional writer and has continued expanding outside of its Midwest concentration. West Bend also benefits from an appropriate ERM program that supports its risk profile and comprehensive reinsurance program.
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Source: BusinessWire