S&P’s Drops Insurance Co. of West and Related Ratings to ‘BBpi’

January 13, 2003

Standard & Poor’s has lowered to ‘BBpi’ from ‘BBBpi’ its counterparty credit and financial strength ratings on Insurance Co. of the West (83.5 percent) and its qualifying inter-affiliated pool members, The Explorer Insurance Co. (15.0 percent) and Independence Casualty & Surety Co. (1.5 percent) (collectively ICW group).

“The rating action is based on a decline in capitalization and surplus and poor operating performance following several years of adverse reserve development,” credit analyst Alan Koerber said.

Headquartered in San Diego, the company writes mainly workers’ compensation and private passenger auto. Business in the company’s major states of operations – California, Texas, Colorado, and Nevada -constitutes more than 75 percent of its total revenue and its products are distributed primarily through independent agents.

Western Insurance Holdings, Inc. owns Insurance Co. of the West which in turn directly owns The Explorer Insurance Co. and Independence Casualty & Surety Co. ICW group is licensed in 42 states and is a large group with 2001 surplus of $162.0 million.

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