NOVEMBER 13, 2020 01:14 PM (EST)

AM Best Downgrades and Withdraws Credit Ratings of Navigators International Insurance Company, Ltd.

 Barnaby Unwin Hoskins
Financial Analyst
+44 20 7397 0327

Ghislain Le Cam, CFA, FRM
Director, Analytics
+44 20 7397 0268

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644


LONDON - NOVEMBER 13, 2020 01:14 PM (EST)
AM Best has downgraded the Financial Strength Rating (FSR) to A- (Excellent) from A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) to “a-” from “a+” of Navigators International Insurance Company, Ltd. (NIIC) (United Kingdom). The outlook of the FSR has been revised to negative from stable, while the outlook of the Long-Term ICR is negative. Concurrently, AM Best has withdrawn these Credit Ratings (ratings) as the company has requested to no longer participate in AM Best’s interactive rating process.

The ratings reflect NIIC’s balance sheet strength, which AM Best categorises as very strong, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management. The ratings also reflect, in the form of lift, the support provided to NIIC by its ultimate parent The Hartford Financial Services Group, Inc. (The Hartford).

The rating actions reflect NIIC’s continued lack of strategic direction. As a consequence, AM Best has revised its business profile assessment for NIIC to limited and lowered the level of lift that it receives from The Hartford as, in AM Best’s view, its importance to its ultimate parent has diminished.

The negative outlook on the ratings reflects uncertainty as to the prospective level of commitment to NIIC from The Hartford as its future strategic role within the wider group is unclear.

NIIC’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), improved to the strongest level at year-end 2019, as a result of a decrease in underwriting risk following the reorganisation of The Hartford group’s operations in Europe. The balance sheet strength assessment also considers NIIC’s high quality investment portfolio and its comprehensive reinsurance protection.

NIIC’s operating performance has been marginal since inception due to unexpectedly large claims and high start-up expenses relative to premium underwritten. AM Best expects prospective underwriting results to remain affected by the company’s lack of scale.

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 specialising 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.

Related Companies

For information about each company, including the Best's Credit Reports, group members (where applicable) and news stories, click on the company name. An additional purchase may be required.