News Column

A.M. Best Revises Outlook to Positive for Westminster American Insurance Company

July 16, 2014

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Besthas revised the outlook to positive from stable and affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of Westminster American Insurance Company (Westminster) (Owings Mills, MD).

The positive outlook reflects Westminster’s strong capitalization, positive pre-tax operating income and its continued profitable underwriting performance, which is attributable to management’s underwriting expertise within its growing commercial lines book of business. Westminster’s favorable capital position is derived from its demutualization in 2005 and the capital contribution from its owner, Westminster American, LLC. Additionally, the management team implemented corrective actions over several years that have vastly improved Westminster’s operating performance causing surplus growth through internal operations.

Partially offsetting these positive rating factors are Westminster’s geographic concentration and slightly elevated expense ratio. Property risks are geographically concentrated in Maryland and the District of Columbia exposing the company’s surplus to weather-related events and competitive market conditions. However, Westminster maintains a comprehensive reinsurance program, which mitigates the impact of catastrophic weather-related loss events, while focusing its efforts on gradual geographic diversification though expanded distribution channels. The company’s expenses are somewhat elevated as a result of increased commissions as well as the moving of its headquarters accompanied by updated technology efforts.

Westminster writes property/casualty business in Maryland, District of Columbia, Pennsylvania, New Jersey, Virginia and Delaware. Westminster’s focus is on commercial lines with business owners’ coverage for apartments, condominiums, cooperatives, rental dwellings and retail risks.

Continued positive rating action is contingent upon the company’s ability to sustain favorable operating trends, positive underwriting results and favorable loss-reserve development while maintaining strong risk-adjusted capitalization and adequate leverage measures as they continue to grow. Negative rating actions may occur if the operating and underwriting results deteriorate, or if risk-adjusted capitalization declines significantly during the growth.

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. Best’s Credit Rating Methodology can be found at

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit

Copyright © 2014 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best Company

Colette Fearon

Financial Analyst

(908) 439-2200, ext. 5548


Joseph Burtone

Assistant Vice President

(908) 439-2200, ext. 5125


Christopher Sharkey

Manager, Public Relations

(908) 439-2200, ext. 5159


Jim Peavy

Assistant Vice President, Public Relations

(908) 439-2200, ext. 5644

Source: A.M. Best Company

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