(BRK.A), (BRK.B)
A.M. Best has upgraded the Financial Strength Rating (FSR) to A++ (Superior) from A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) to aa+ from a- of Mount Vernon Specialty Insurance Company and Radnor Specialty Insurance Company (both domiciled in Omaha, NE), strategic affiliates of United States Liability Insurance Company (USLI) (Wayne, PA) that are branded as Devon Park Specialty.
Concurrently, A.M. Best has affirmed the FSR of A++ (Superior) and the Long-Term ICRs of “aa+” of USLI and its subsidiaries: Mount Vernon Fire Insurance Company (MVF) (Wayne, PA) and U.S. Underwriters Insurance Company (USU) (Bismarck, ND). The outlook of these Credit Ratings (ratings) is stable.
According to A.M. Best, the ratings of the insurance operating companies reflect their superior risk-adjusted capital position, extended trends of underwriting and operating profitability, very strong market presence and conservative reserve positions. Additional favorable factors include a proactive claims management philosophy, exceptional diversification in their book of business as it regards limiting concentrations, commitment to customer service, and extensive employee training and retention programs that translate into a culture of success.
Furthermore, these ratings continue to benefit from implicit and explicit support provided to USLI and its subsidiaries by their ultimate parent, Berkshire Hathaway Inc.
This support, for some of the operating companies, is in the form of significant reinsurance treaties with National Indemnity Company, a Berkshire subsidiary. In addition to this agreement, Berkshire has established an extended track record of supporting its member companies.
These positive rating factors are partially offset by the above average investment leverage recorded by the group. A.M. Best also continues to monitor the organizational structure and market changes implemented at USLI as it regards the Devon Park Specialty branded companies.
© 2016 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.