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A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and issuer credit ratings of “a” of Western Surety Company and its subsidiaries, Surety Bonding Company of America and Universal Surety of America, collectively referred to as Western Surety (and previously known as CNA Surety Corporation Group) (headquartered in Chicago, IL). The outlook for all ratings is stable. The ratings reflect Western Surety’s excellent level of risk-adjusted capitalization, historically profitable underwriting and operating performance and leading market position in the contract and miscellaneous surety bond markets. These positive rating factors are derived from Western Surety’s clearly defined target markets, extensive distribution network, disciplined underwriting, credit risk management and strong servicing capabilities. In addition, Western Surety maintains a well-diversified surety and fidelity book of business with respect to products, geography and market segments, which enables the group to leverage its broad-based expertise to develop and expand its leadership position in the surety marketplace. Western Surety benefits from the financial flexibility of its indirect parent, CNA Financial Corporation (NYSE:CNA), which has relatively low financial leverage and solid coverage ratios. Partially offsetting these positive rating factors are the sluggish construction market and the highly competitive environment in the surety market, which will pressure underwriting margins over the near term. As of the third quarter of 2013, Western Surety continued to report strong underwriting and operating results, which it received, in part, from favorable prior year loss reserve development. A.M. Best anticipates the group will maintain its solid underwriting and operating performance for the remainder of 2013 and near term, despite the current weakness in the construction industry, the broader economy, the competitive environment in its markets and the likelihood of a reduced level of favorable prior year loss reserve development. While the ratings for Western Surety are stable, future positive rating actions may result if it continues its strong underwriting and operating performance. However, negative rating actions could result if underwriting and operating performance or risk-adjusted capitalization falls markedly short of A.M. Best’s expectations.