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TMCNet:  A.M. Best Revises Outlooks to Negative for West Virginia National Auto Insurance Company

[August 11, 2017]

A.M. Best Revises Outlooks to Negative for West Virginia National Auto Insurance Company

A.M. Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of "bb" of West Virginia National Auto Insurance Company (West Virginia National Auto) (Morgantown, WV).

The revised outlooks are due to West Virginia National Auto's deteriorating risk-adjusted capitalization from unprofitable operating performance in recent years. Management fell short of projections mainly due to an unfavorable book of business, which ultimately has been non-renewed. Additionally, the company maintains geographic concentration exposing surplus to regulatory, judicial and economic concerns, as well as the cyclical nature of competition altering the market share within its domiciled state.

Partially offsetting these negative rating factors are management's expertise in West Virginia and the non-standard market, and its ability to react quickly to maintain favorable leverage measures. Historically, results of the core book of business in West Virginia have been stable. Policies are shorter term, and rate changes are quickly felt in the results. Management maintains good relationships with its agency force, and current disruptions have allowed for new agency relationships to form. Also, communication with reinsurance partners allow for changes in quota share agreements in the even that leverage measures are outside of the company's risk tolerance levels.

This press release relates to Credit Ratings that have been published on A.M. 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 A.M. 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 A.M. Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating Action Press Releases.

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