A.M. Best Revises Outlook to Positive for Repwest Insurance Company

A.M. Best Revises Outlook to Positive for Repwest Insurance Company

A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating of B+ (Good) and issuer credit rating of “bbb-” of Repwest Insurance Company (Repwest) (Phoenix, AZ).

The actions reflect Repwest’s strong level of risk-adjusted capitalization and favorable operating performance over the past five years, following management’s decision to focus solely on its U-Haul related business. Furthermore, Repwest’s publicly traded parent, AMERCO [NASDAQ: UHAL], does not rely on its insurance operations to meet its debt service and holding company obligations, which further benefits surplus generation.

These positive rating factors are offset by Repwest’s historically poor underwriting performance driven by significant adverse loss reserve development associated with discontinued business, as well as the company’s high cost structure. Despite these concerns, the outlook is based on A.M. Best’s expectation that Repwest’s solid operating performance will continue to offset any earnings drag generated by its discontinued operations and contribute to its surplus growth over the near term.

The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; and “Natural Catastrophe Stress Test Methodology.” Methodologies can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2011 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

A.M. Best Co.
Brian O’Larte, 908-439-2200, ext. 5138
Senior Financial Analyst
brian.o’larte@ambest.com
or
Michelle Baurkot, ARe, ARM, 908-439-2200, ext. 5507
Assistant Vice President
michelle.baurkot@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
rachelle.morrow@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com