Recognizing in part its “well-established market position as a leading excess and surplus lines company,” A.M. Best has reaffirmed the ratings of Glen Allen, Va.-based Markel North America Insurance Group and its members.

The ratings service affirmed a financial strength rating of A (Excellent) and issuer credit rating of “a+” for Markel and six of its members: Associated International Insurance Co., Deerfield Insurance Co., Essex Insurance Co., Evanston Insurance Co. and Markel Insurance Co.

A.M. Best also affirmed an issuer credit rating of “bbb+” to Markel Corp., also located in Glen Allen. The outlook for all ratings is stable, according to A.M. Best.

In addition to its market position, the ratings service said the ratings action reflects Markel’s sustained operating profitability on a pretax basis and the group’s solid risk-adjusted capitalization. The ratings also acknowledge the group’s excellent operating cash flow, adequate liquidity and the financial flexibility of Markel Corp.

A.M. Best also noted factors tempering the positive factors, including Markel’s elevated underwriting leverage and above average common stock leverage. Markel has long held an underwriting leverage position higher than the average of the surplus lines composite, the ratings service noted, driven by its conservative loss reserving.

Significant capital losses in 2008, on both a realized and unrealized basis, reflect the impact of the financial market crisis and the group’s posting of a net operating loss last year was driven by “other than temporarily impaired charges,” the ratings service said.

A 2008 decline in surplus is attributed to dividends paid, a change in unrealized gain/loss and a change in non-admitted assets relating to deferred tax assets, A.M. Best noted.

Despite the elevated underwriting leverage, the ratings service said Markel’s capitalization still supports its current ratings. Prior to 2008, excellent operating performance had fueled surplus appreciation annually helping to fortify capital strength, the ratings service said.