News Release: A.M. Best Upgrades Ratings of United Automobile Insurance Company

Oct 3, 2011

The following news release was posted to on October 3, 2011:

A.M. Best Upgrades Ratings of United Automobile Insurance Company

A.M. Best Co. has upgraded the financial strength rating (FSR) to C++ (Marginal) from C (Weak) and the issuer credit rating (ICR) to “b” from “ccc” of United Automobile Insurance Company (United Auto) (Miami Gardens, FL). The ratings have been removed from under review with developing implications and assigned a stable outlook. A.M. Best also has withdrawn the FSR of C (Weak) and ICR of “ccc” of United Automobile Insurance Group (Miami Gardens, FL), due to the group no longer being in existence.

These rating actions follow United Auto’s subsidiary, Argus Fire & Casualty Insurance Company (Argus), fulfilling the terms of a Consent Order issued by the Florida Office of Insurance Regulation on May 31, 2011, which required Argus to cancel all in force policies. The ratings of United Auto reflects its adequate risk-adjusted capitalization and variability of operating results in recent years, led by investment and fee income, during a period of challenging economic conditions, particularly within its niche of personal non-standard automobile. Where necessary, the company has adjusted rates, which led to some improvement in underwriting performance in recent years. In addition, United Auto’s loss reserve strengthening and more favorable loss trends, albeit still inconsistent, have helped to improve the company’s development in recent periods.

These positive rating factors are somewhat offset by United Auto’s historically variable underwriting performance. Furthermore, United Auto has maintained elevated underwriting leverage measures in recent years, which has put pressure on its risk-adjusted capital position. Moreover, the company maintains a somewhat modest business profile with limited product availability and concentrations in states with difficult operating environments for the non-standard automobile segment.

The principal methodology used in determining these ratings is Best’s Credit Rating Methodology — Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include “Risk Management and the Rating Process for Insurance Companies” and “Understanding BCAR for Property/Casualty Insurers.” Methodologies can be found at .

Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit

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