A.M. Best Affirms Ratings of Kansas Bankers Surety Company

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A.M. Best Affirms Ratings of Kansas Bankers Surety Company

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has affirmed the financial strength rating of A++ (Superior) and issuer credit rating of "aa+" of Kansas Bankers Surety Company (Kansas Bankers) (Topeka KS). The outlook for both ratings is stable.

Kansas Bankers continues to maintain superior risk-adjusted capitalization, solid balance sheet liquidity and strong niche market presence in the small to medium-sized commercial bank market. The positive rating attributes are supported by Kansas Bankers' conservative underwriting leverage measures, high quality balance sheet and its recognition among Midwest regional commercial banks, a market the company has served for decades.

Furthermore, the ratings recognize explicit support from Kansas Bankers' direct parent, National Indemnity Company, and the additional financial flexibility and support provided by Kansas Bankers' publicly traded parent company and ultimate shareholder, Berkshire Hathaway Inc. [NYSE: BRKA and BRK B].

The positive rating factors are partially offset by Kansas Bankers' lackluster operating results in recent years and business concentration risks arising from its product and geographic focus on the banking industry in the Midwest. With a heavy concentration in the Midwest, the company's top five states account for nearly 70% of direct premiums written, which may leave it susceptible to economic, regulatory and competitive market changes. Nevertheless, the outlook reflects Kansas Bankers' superior risk-adjusted capitalization and proven expertise in its niche market.

A.M. Best believes Kansas Bankers is well positioned at its current rating level. However, negative rating actions could occur if there is a continued decline in underwriting and operating performance and/or a considerable deterioration in risk-adjusted capitalization as measured by Best's Capital Adequacy Ratio, or if A.M. Best determines that the company's strategic importance to its ultimate parent no longer warrants rating enhancement.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

A.M. Best Co.
Robert Valenta, 908-439-2200, ext. 5291
Senior Financial Analyst
Gerard Altonji, 908-439-2200, ext. 5626
Assistant Vice President
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations

KEYWORDS:   United States  Europe  North America  New Jersey


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