Noting its parent company’s sustained profitability and strong capitalization, A.M. Best has revised the issuer credit ratings of United States Surety Co., based in Timonium, Md.

The ratings service revised the outlook to “positive,” from “stable,” and upgraded the issuer credit rating to “a+” from “a” and affirmed the financial strength rating of “A” (Excellent) for USSC with a stable outlook.

A.M. Best also affirmed the ICR of “aa-” and the financial strength rating of “A+” (Superior) for parent company Houston Casualty Group, based in Houston, Texas. The outlook for the ICR was revised to “positive,” from “stable,” and the outlook for the FSR is “stable.”

USSC is a member company of HCC Surety Group, operating on an admitted basis throughout the mid-Atlantic and specializing in contract bonds. As of Dec. 31, 2008, USSC has statutory policyholders’ surplus of $37.4 million, gross written premium of $24.7 million and net written premium of $23.5 million, according to the company.

Among the factors for the ratings, according to the rating service is the moderate financial leverage and substantial financial flexibility at HCC Holdings.

HCC’s business strategies have focused on a conservative investment strategy, A.M. Best noted, and on underwriting within narrowly defined specialty lines, effective utilization of affiliated underwriting agencies/insurance intermediaries and the optimal utilization of reinsurance protection.

“These strategies have helped produce increased operating profits in recent years despite challenging market conditions,” the ratings service said. “The ratings also acknowledge HCC’s near-term earnings prospects and its strong position in the specialty admitted and non-admitted markets.”

A.M. Best also has upgraded the ICR to “a+” from “a” and affirmed the FSR of A (Excellent) of American Contractors Indemnity Co. of Los Angeles, Calif., and affirmed the FSR of A- (Excellent) and ICR of “a-” of Pioneer General Insurance Co. of Denver, Colo.

Additionally, A.M. Best has affirmed the FSRs of “A+” (Superior) and “A” (Excellent) and ICRs of “aa-” and “a+” of HCC Life Insurance Co. of Indianapolis, Ind. and Perico Life Insurance Co. of Dover, Del., respectively.