A.M. Best Co. has upgraded the financial strength rating to B++ (Good) from B+ (Good) and issuer credit rating to bbb+ from bbb- of Westminster American Insurance Company (Westminster) (Westminster, MD). The outlook for both ratings has been revised to stable from positive.

The ratings reflect Westminster's favorable risk-adjusted capitalization and improved operating performance. Westminster's strong capital position is derived from the 2005 demutualization, several years of positive operating results and a capital contribution from its new owner. In addition, the new management team, which has been overseeing Westminster's operations since 2005, continues to implement strategies that have improved the company's operating performance and increased policyholders' surplus. Furthermore, the management team is focused on growing its commercial book of business and, as such, continues to enhance the company's product offerings and technology capabilities.

Partially offsetting these positive rating factors is Westminster's geographic concentration of property risks in Maryland and Washington D.C., which exposes the company to weather-related events and potential market pressures, as well as the financial leverage at the holding company, Westminster American, LLC. Additionally, the underwriting expense ratio is elevated due to reinsurance costs, automation improvement expenses and other general operating expenses.

For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at http://www.ambest.com/ratings/methodology.