A.M. Best Downgrades and Places Ratings of Repwest Insurance Company Under Review With Negative Implications

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has downgraded the financial strength rating to B (Fair) from B+ (Good) and issuer credit rating to “bb+” from “bbb-” of Repwest Insurance Company (Repwest) (Phoenix, AZ). Both ratings have been placed under review with negative implications. Repwest is a wholly owned subsidiary of AMERCO [NASDAQ: UHAL].

These actions are a result of the significant strengthening in the fourth quarter of 2011 of Repwest’s loss reserves related to its discontinued excess workers’ compensation line of business, which substantially exceeded A.M. Best’s expectations. The reserve action resulted in notable deterioration of Repwest’s operating results (which have been profitable in recent years) in 2011 and generated a significant reduction in its reported policyholder surplus at year-end 2011.

The negative implications reflect A.M. Best’s concerns regarding the scope of the reserve strengthening and Repwest’s processes for monitoring and managing its excess workers’ compensation claims, as well as the potential for deterioration in the company’s financial condition should additional actions be required to bring the loss reserves to an adequate level. The ratings will remain under review pending A.M. Best’s discussion with Repwest’s management regarding its loss reserve position and claims practices.

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. Key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; and “Natural Catastrophe Stress Test Methodology.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visitwww.ambest.com.

Copyright © 2012 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best Co.
Brian O’Larte
Senior Financial Analyst
(908) 439-2200, ext. 5138
brian.o'[email protected]
or
Jennifer Marshall
Managing Senior Financial Analyst
(908) 439-2200, ext. 5327
[email protected]
or
Rachelle Morrow
Senior Manager, Public Relations
(908) 439-2200, ext. 5378
[email protected]
or
Jim Peavy</b>
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644
[email protected]