AM Best Affirms Credit Ratings of Old United Casualty Company
July 18 2024 - 12:49PM
Business Wire
AM Best has affirmed the Financial Strength Rating of A
(Excellent) and the Long-Term Issuer Credit Rating of “a+”
(Excellent) of Old United Casualty Company (OUC) (Merriam, KS). The
outlook of these Credit Ratings (ratings) is stable.
The ratings reflect OUC’s balance sheet strength, which AM Best
assesses 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 driven 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 low underwriting leverage. The company has a
record of strong operating performance, categorized by profitable
underwriting results and a supportive level of income from its
investment portfolio. The company benefits from being affiliated
with Berkshire Hathaway Inc. (Berkshire), its ultimate parent.
Additionally, Berkshire manages OUC’s investment portfolio. OUC’s
investment returns have benefited significantly from the current
interest rate environment, as short-term U.S. Treasury bills make
up the majority of its portfolio.
OUC specializes in providing vehicle service contracts,
primarily to affiliated automobile dealerships owned by Berkshire
Hathaway Automotive. OUC exercises superior loss control as a
result of its affiliation and also benefits from the marketing and
distribution platforms provided by these affiliates.
AM Best views OUC’s business profile as limited. Auto warranty
represents over 90% of OUC’s business, with substantial geographic
concentration in a few states. AM Best considers ERM appropriate
relative to the company’s risk profile.
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 Guide to Best's Credit Ratings. For information
on the proper use of Best’s Credit Ratings, Best’s Performance
Assessments, Best’s Preliminary Credit Assessments and AM Best
press releases, please view Guide to Proper Use of Best’s
Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
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Christopher Pennings, CPCU Financial Analyst +1
908 882 2237 christopher.pennings@ambest.com
Steven M. Chirico Director +1 908 882 1694
steven.chirico@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com