AM Best Revises Issuer Credit Outlook to Positive for Trans World Assurance Company
April 17 2024 - 2:28PM
Business Wire
AM Best has revised the outlook to positive from stable
for the Long-Term Issuer Credit Rating (Long-Term ICR) and affirmed
the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term
ICR of “bbb” (Good) of Trans World Assurance Company (TWA) (San
Mateo, CA). The outlook of the FSR is stable.
The Credit Ratings (ratings) reflect TWA’s balance sheet
strength, which AM Best assesses as very strong, as well as its
adequate operating performance, limited business profile and
marginal enterprise risk management (ERM).
The outlook revision to positive reflects TWA’s long-term
improvement in ERM, which has come more in line with its peers. The
company’s overall ERM program and risk management and controls have
become more formalized. Risk identification and reporting are
better documented, with risks being scored for likelihood and
severity of impact. The company has established several committees
as a part of its risk management process, with well-defined roles
and responsibilities. Additionally, TWA’s relatively small size and
close communications of its senior management team have allowed the
company to respond quickly to any issues that may arise.
The balance sheet strength of TWA is assessed as very strong,
driven by the strongest level of risk-adjusted capitalization, as
measured by Best’s Capital Adequacy Ratio (BCAR). Capital and
surplus has increased in recent years due to TWA’s consistent
operating income but has been dragged by dividends paid to the
holding company. The operating performance of TWA is assessed as
adequate, evident by the steady operating earnings that it has
experienced. Net premium growth has been flat over the past five
years, but management has indicated initiatives the company will
take to help grow premium. The business profile of TWA is assessed
as limited as the company operates in a niche marketplace, mainly
serving the military community.
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.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance
industry. Headquartered in the United States, the company does
business in over 100 countries with regional offices in London,
Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more
information, visit www.ambest.com.
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Michael Lynch Financial Analyst +1 908 882 2077
michael.lynch@ambest.com
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Edward.Kohlberg@ambest.com
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908 882 2318 al.slavin@ambest.com