AM Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Ratings of “aa-” (Superior) of WestGUARD Insurance Company, AmGUARD Insurance Company, EastGUARD Insurance Company, NorGUARD Insurance Company and AZGUARD Insurance Company (Omaha, NE), which operate under an intercompany pooling agreement. These companies are members of Berkshire Hathaway GUARD Insurance Companies (GUARD) and are domiciled in Wilkes-Barre, PA, unless otherwise specified. The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect GUARD’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management, with lift from parental support.

GUARD has maintained risk-adjusted capitalization consistently at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The group’s overall balance sheet strength also benefits from ample liquidity, aided by significant allocations to cash and high-quality, short-duration fixed income investments. Similar to other Berkshire Hathaway Inc. (Berkshire) affiliates, GUARD also has a relatively high allocation to equity investments. This can lead to occasional fluctuations in surplus levels during periods of capital market volatility, but Berkshire’s investment strategies historically have demonstrated a track record of positive returns and capital appreciation over time. GUARD’s overall balance sheet strength assessment also considers its uneven loss reserve development patterns over the past several years, which has included occasional reserve strengthening in certain business lines outside of its core workers’ compensation product offerings.

GUARD’s operating performance declined sharply in 2023, following a period of several years when the group had generated results consistently that were supportive of the adequate operating performance assessment. GUARD’s results in 2023 included significant underwriting losses that included the impact of material reserve strengthening across several business lines. AM Best notes that GUARD has made several changes to its senior management team over the past 12 months, and that the group’s new leadership has implemented a number of underwriting initiatives that are intended to improve performance while refocusing the group on its aim to be a national primary carrier for micro and small business owners, offering one-stop-shop insurance solutions while growing its excess & surplus market presence. AM Best expects the company’s performance metrics to improve gradually given the changes described above, and that its overall operating results will return to levels that are supportive of its current ratings over the near term.

GUARD’s ratings further recognize the implicit and explicit financial support provided by GUARD’s immediate parent, National Indemnity Company, a subsidiary of Berkshire, including significant capital support via reinsurance transactions and capital contributions.

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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