OLDWICK, N.J.--(Business Wire)--
A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent)
and issuer credit ratings (ICR) of "a" of Western Surety Company (WSC) and its
subsidiaries, Surety Bonding Company of America (SBCA) and Universal Surety of
America (Universal Surety), collectively referred to as Western Surety (and
previously known as CNA Surety Corporation Group [CNA Surety]) (headquartered in
Chicago, IL). The outlook for all ratings is stable.
The ratings reflect Western Surety`s excellent level of risk-adjusted
capitalization, historically profitable underwriting and operating performance
and leading market position in the contract and miscellaneous surety bond
These positive rating factors are derived from Western Surety`s clearly defined
target markets, extensive distribution network, disciplined underwriting, credit
risk management and strong servicing capabilities. In addition, Western Surety
maintains a well-diversified surety and fidelity book of business with respect
to products, geography and market segments, which enables the group to leverage
its broad-based expertise to develop and expand its leadership position in the
surety marketplace. Western Surety benefits from the financial flexibility of
its indirect parent, CNA Financial Corporation (CNAF) [NYSE: CNA], which has
relatively low financial leverage and solid coverage ratios.
Partially offsetting these positive rating factors is the sluggish construction
market and the highly competitive environment in the surety market, which will
pressure underwriting margins over the near term.
As of third quarter of 2012, Western Surety continued to report strong
underwriting and operating results, which it received, in part, from favorable
prior year loss reserve development. A.M. Best anticipates the group will
achieve positive underwriting and operating performance for the remainder of
2012 and near term, despite the current weakness in the construction industry
and the economy (on a lagged basis to a certain degree), the competitive
environment in its markets and the likelihood of a reduced level of favorable
prior year loss reserve development.
While the ratings for Western Surety are stable, future positive rating actions
may result if it continues its strong underwriting and operating performance.
However, negative rating actions could result if the underwriting and operating
performance falls markedly short of A.M. Best`s expectations.
The methodology used in determining these ratings is Best`s Credit Rating
Methodology, which provides a comprehensive explanation of A.M. Best`s rating
process and contains the different rating criteria employed in the rating
process. Key criteria utilized include: "Risk Management and the Rating Process
for Insurance Companies"; "Catastrophe Analysis in A.M. Best`s Ratings";
"Insurance Holding Company and Debt Ratings"; "Understanding BCAR for
Property/Casualty Insurers"; and "Rating Members of Insurance Groups." Best`s
Credit Rating Methodology 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
Copyright © 2013 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.
A.M. Best Company
Brian O`Larte, 908-439-2200, ext. 5138
Senior Financial Analyst
Jennifer Marshall, 908-439-2200, ext. 5327
Managing Senior Financial Analyst
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
Copyright Business Wire 2013