RTWI Rtw (MM)

A.M. Best Co. has upgraded the financial strength rating (FSR) to B++ (Very Good) from B+ (Very Good) of American Compensation Insurance Company (ACIC). A.M. Best has also assigned a FSR of B++ (Very Good) to RTW Group and Bloomington Compensation Insurance Company (BCIC), a reinsured wholly owned subsidiary of ACIC. Both ACIC and BCIC are members of the RTW Group and operate as subsidiaries of RTW, Inc. (NASDAQ: RTWI). The ratings are based on the consolidated operating performance and financial condition of the two insurers. Concurrently, A.M. Best has upgraded the ICRs to "bbb+" from "bbb-" and to "bb+" from "bb-", respectively, for ACIC and RTW, Inc. A.M. Best has also assigned ICRs of "bbb+" to RTW Group and BCIC. All companies are domiciled in Bloomington, MN. The outlook for all ratings is positive. The ratings reflect RTW Group's strong capitalization, focus on integrated absence management and significantly improved underwriting profitability. After changing the executive management team in December 2001, the group closed unprofitable regions, reduced premiums in force, improved pricing and refocused on its specific underwriting niche and proactive claims and case management. The principal negative rating factor is the group's poor operating performance in earlier years prior to 2002, which resulted in significant reserve charges leading to net losses and surplus declines in 2002, 2001 and 1998. Nevertheless, the outlook reflects the group's significant turnaround in operating performance through profitable underwriting and improved claims management, which have contributed to solid organic growth in surplus since 2001. For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. For current Best's Ratings, independent data and analysis on more than 3,000 individual property/casualty companies and A.M. Best groups, please visit www.ambest.com/pc. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.