A.M. Best Co. has upgraded the issuer credit rating to "bbb+" from "bbb" and affirmed the financial strength rating of B++ (Good) of PacWest Captive Insurance Company, Inc. (PacWest) (Scottsdale, AZ). The outlook for both ratings has been revised to positive from stable.
These rating actions reflect PacWest`s excellent capitalization, strong profitability and the continued financial support it receives in the form of ongoing capital contributions by participating agencies (shareholders) of Leavitt Group. PacWest`s favorable operating performance is derived from its strict underwriting guidelines, conservative investment policy and successful business model.
These positive factors are somewhat offset by the company`s aggressive growth in both premium volume and associated liabilities in recent years, as well as its business concentration risk, operating as a monoline workers` compensation insurer with the majority of its premium volume coming from the state of California. In an effort to limit its concentration risk, PacWest`s management is focused on growing its book of business outside of California in states where Leavitt Group agencies are located.
