AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” (Excellent) of Old United Casualty Company (OUC) (Merriam, KS). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect OUC’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).

OUC’s balance sheet strength assessment is driven by its risk-adjusted capitalization being at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), as well as its strong liquidity and low underwriting leverage. The company has a record of strong operating performance, categorized by profitable underwriting results and a supportive level of income from its investment portfolio. The company benefits from being affiliated with Berkshire Hathaway Inc. (Berkshire), its ultimate parent. Additionally, Berkshire manages OUC’s investment portfolio. OUC’s investment returns have benefited significantly from the current interest rate environment, as short-term U.S. Treasury bills make up the majority of its portfolio.

OUC specializes in providing vehicle service contracts, primarily to affiliated automobile dealerships owned by Berkshire Hathaway Automotive. OUC exercises superior loss control as a result of its affiliation and also benefits from the marketing and distribution platforms provided by these affiliates.

AM Best views OUC’s business profile as limited. Auto warranty represents over 90% of OUC’s business, with substantial geographic concentration in a few states. AM Best considers ERM appropriate relative to the company’s risk profile.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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