AM Best

A.M. Best Places Ratings of Wright National Flood Insurance Company Under Review Following Announced Transaction


Fred Eslami

Senior Financial Analyst

(908) 439-2200, ext. 5406

Steven Chirico, CPA

Assistant Vice President

(908) 439-2200, ext. 5087

Rachelle Morrow

Senior Manager, Public Relations

(908) 439-2200, ext. 5378

Jim Peavy

Assistant Vice President, Public Relations

(908) 439-2200, ext. 5644


OLDWICK, N.J. - JANUARY 16, 2014 12:00 AM (EST)
A.M. Best Co. has placed under review with developing implications the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of Wright National Flood Insurance Company (WNFIC) (San Antonio, TX). These rating actions follow the recent announcement by WNFIC of the transaction with its ultimate parent, The Wright Insurance Group, LLC (TWIG) and Brown & Brown, Inc. (B&B) [NYSE: BRO].

Under the terms of the transaction and subject to regulatory approvals, B&B will acquire 100% of the membership interests of TWIG and its subsidiaries, with the exception of WRM America Indemnity Company (Uniondale, NY). However, the proposed transaction does include WNFIC and Wright National Flood Insurance Services, LLC.

The ratings of WNFIC reflect its adequate risk-adjusted capitalization and relatively favorable operating results, as well as governmental support. Offsetting these positive rating factors is the potential concentration of risk derived from excess flood policies, albeit small in nature, and changes in the macroeconomic environment. WNFIC derives significant revenue and fee-based income from its book of non-risk-bearing National Flood Insurance Program (NFIP) business, as well as from its excess flood coverage. These factors are expected to significantly contribute to the company's overall profitability. Upon completion of the proposed transaction with B&B, WNFIC is expected to continue its NFIP program.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at

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