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A.M. Best Revises Outlook to Negative for Workmen's Auto Insurance Company

OLDWICK, N.J. - (BUSINESS WIRE) - A.M. Best Co. has revised the outlook to negative from stable and affirmed the financial strength rating of B (Fair) and issuer credit rating of "bb" of Workmen's Auto Insurance Company (Workmen's) (Los Angeles, CA).

The revised outlook reflects the deterioration in Workmen's risk-adjusted capitalization following significant operating losses in 2008.

The ratings of Workmen's reflect its marginal risk-adjusted capitalization and elevated underwriting leverage. Underwriting performance was impacted by significant underwriting losses as well as one time costs due to expenses from litigation and the execution of management's product and distribution strategies. In addition, the ratings recognize the company's concentration of exposures in the non-standard automobile line of business.

These rating factors are partially offset by the actions of the management team who implemented refined underwriting procedures, revised rates, expanded its product distribution, initiated agency management strategies and improved claims procedures. Additionally, Workmen's holds a conservative investment portfolio consisting primarily of highly-rated bonds, which generated relatively consistent levels of investment income that offset underwriting losses over the past five years.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

A.M. Best Co.
Analysts
Michael Russo, 908-439-2200, ext. 5372
michael.russo@ambest.com
or
Rick Decker, 908-439-2200, ext. 5423
william.decker@ambest.com
or
Public Relations
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com