OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has affirmed the Financial Strength Rating of A
(Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of
“a+” of Old United Casualty Company (OUC) and Old United Life Insurance
Company (OUL). The outlook of these Credit Ratings (ratings) is stable.
Both companies are headquartered in Shawnee Mission, KS.
The ratings of OUC reflect its balance sheet strength, which AM Best
categorizes as strongest, as well as its strong operating performance,
limited business profile and appropriate enterprise risk management
(ERM).
OUC’s balance sheet strength assessment is underpinned by its
risk-adjusted capitalization being at the strongest level, as measured
by Best’s Capital Adequacy Ratio (BCAR), as well as its strong liquidity
and conservative investment portfolio. The company has a record of
strong operating performance, underpinned by consistently profitable
underwriting results and a healthy level of investment income from its
investment portfolio. Additionally, the company benefits from being
affiliated with Berkshire Hathaway, Inc. (Berkshire), its ultimate
parent. OUC specializes in providing vehicle service contracts,
primarily to affiliated automobile dealerships owned by Berkshire
Hathaway Automotive. OUC benefits from the marketing and distribution
platforms provided by these affiliated dealerships and manages to
exercise superior loss control.
The ratings of OUL reflect its balance sheet strength, which AM Best
categorizes as very strong, as well as its marginal operating
performance, limited business profile and appropriate ERM.
OUL’s strongest level of risk-adjusted capitalization, as measured by
BCAR, and high levels of liquidity are offset by the company’s marginal
operating performance, which includes modest but positive operating
earnings and continuing sales declines as consumer preferences have
shifted away from credit life and credit accident and health products to
vehicle service contracts, such as those sold by OUC. OUL also benefits
from its affiliation with Berkshire and the same affiliated automotive
dealerships as OUC.
AM Best views OUC and OUL’s business profiles as limited. Auto warranty
represents over 90% of OUC’s business, with substantial geographic
concentration in a few states. OUL’s credit life and credit accident and
health products also are focused in the automotive market and
geographically concentrated with more than 90% of its business in
Michigan, Texas and Arizona. ERM is considered appropriate relative to
the risk profile of both companies.
This press release relates to Credit Ratings that have been published
on AM Best’s website. For all rating information relating to the release
and pertinent disclosures, including details of the office responsible
for issuing each of the individual ratings referenced in this release,
please see AM Best’s Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view Understanding
Best’s Credit Ratings. For information on the proper media
use of Best’s Credit Ratings and AM Best press releases, please view Guide
for Media – Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.
AM Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit www.ambest.com
for more information.
Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.
Contacts
Filippo Novella
Financial Analyst – P/C
+1
908 439 2200, ext. 5486
[email protected]
Richard Francis
Senior Financial Analyst – L/H
+1
908 439 2200, ext. 5152
[email protected]
Christopher Sharkey
Manager, Public Relations
+1
908 439 2200, ext. 5159
[email protected]
Jim Peavy
Director, Public Relations
+1 908
439 2200, ext. 5644
[email protected]
