FEBRUARY 07, 2020 09:11 AM (EST)

AM Best Affirms Credit Ratings of Nagico Holdings Limited’s Main Operating Subsidiaries


CONTACTS:
 Alexander Sarfo
Senior Financial Analyst
+1 908 439 2200, ext. 5779
alexander.sarfo@ambest.com

Sharon Marks
Associate Director
+1 908 439 2200, ext. 5477
sharon.marks@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - FEBRUARY 07, 2020 09:11 AM (EST)
AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Ratings of “bbb+” of the two operating subsidiaries of Nagico Holdings Limited: National General Insurance Corporation (NAGICO) N.V. (St. Maarten) and Nagico Insurance Company Limited (Anguilla). These companies collectively are referred to as NAGICO Group or the group. The outlook of these Credit Ratings (ratings) remains stable.

The ratings of NAGICO Group reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The very strong balance sheet strength assessment reflects the group’s supportive risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). In addition, a major factor in the assessment of the balance sheet strength includes the group’s significant reliance on highly rated reinsurers to protect shareholder equity against natural catastrophes, which NAGICO Group has a material exposure to in the Caribbean. Furthermore, AM Best expects the group’s partnership with Peak Reinsurance Company Limited to continue producing growth opportunities and better asset and investment management, as well as capital support.

The group’s earnings generally have been profitable, despite five-year average underwriting ratios and return metrics that do not compare favorably with most other Caribbean property/casualty insurers that AM Best rates. The group’s profitability during this time was impacted by significant losses in 2017 as a result of hurricanes Irma and Maria. Nevertheless, earnings have contributed to surplus growth in most years and those contributions are expected to continue as management remains focused on adequate-but-competitive pricing and less exposure to hurricanes and natural disasters in its property book.

The group’s neutral business profile is predicated on the diversification between the products and lines of business that it offers its policyholders, being property, motor, marine and liability coverages, as well as life and health insurance. Moreover, NAGICO Group produces and distributes its business through select agents and brokers in 21 territories in the Caribbean, and is among the leaders in several of its primary markets. However, these benefits are offset in part by its overall catastrophe exposure, weakened economic conditions and moderate to very high country risk throughout the Caribbean.

The stable outlooks reflect AM Best’s expectation that the balance sheet strength will be maintained at the very strong level, supported by adequate operating performance over the long-term with no significant changes in the business profile.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.


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