Rating Action on W. R. Berkley - Analyst Blog

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Recently, the issuer credit rating (ICR) and debt rating of W. R. Berkley Corporation ( WRB ) were affirmed by A.M. Best Co. at "a-" and "bbb" for senior secured notes and trust preferred securities, respectively. The rating agency also assigned a "bbb+" debt rating to the company's $350 million 5.625% subordinated debentures due 2053.

Additionally, A. M. Best affirmed the financial strength rating (FSR) and ICR of W. R. Berkley Insurance Group at "A+" and "aa-", respectively. W. R. Berkley Insurance Group consists of Berkley Insurance Company and 24 of its reinsured subsidiaries and affiliates.

All the above-mentioned ratings of W. R. Berkley carry a stable outlook.

The ratings for W. R. Berkley Insurance Group were affirmed on the basis of its long-term trend of favorable underwriting and operating results, strong brand name, reasonable diversification level, and low exposure to catastrophic events.

Good planning and execution of business strategies and favorable prior-year loss reserve development over the past few years also played a role. However, the impact of poor economic environment, falling investment results and high competition partially offset these positives.

While the stable outlook indicates low possibility of a rating revision in the near term, if W. R. Berkley Insurance Group generates significant improvement in operating earnings, leading to stronger risk-adjusted capitalization and enhanced financial leverage, as well as continues to maintain a conservative approach to reserve creation, then an upward revision in outlook is possible.

Alternatively, if W. R. Berkley Insurance Group witnesses considerable adverse reserve development, weakening risk-adjusted capitalization, deteriorated financial leverage and significant decline in operating earnings or future earning prospects, then a downward revision can take place.

W. R. Berkley carries a Zacks Rank #3 (Hold). Other property & casualty insurers worth considering are White Mountains Insurance Group, Ltd. ( WTM ), Hilltop Holdings Inc. ( HTH ) and Montpelier Re Holdings Ltd. ( MRH ). All these companies carry a Zacks Rank #1 (Strong Buy).



HILLTOP HLDGS (HTH): Free Stock Analysis Report

MONTPELIER RE (MRH): Free Stock Analysis Report

BERKLEY (WR) CP (WRB): Free Stock Analysis Report

WHITE MTN INS (WTM): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: HTH , MRH , WR , WRB , WTM

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