AM Best

A.M. Best Affirms Credit Ratings of Wright National Flood Insurance Company


Vicky Riggs
Senior Financial Analyst
+1 908 439 2200, ext. 5039

Daniel J Ryan
Senior Director
+1 908 439 2200, ext. 5325

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

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


OLDWICK - JUNE 30, 2017 10:35 AM (EDT)
A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Wright National Flood Insurance Company (WNFIC) (San Antonio, TX). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect WNFIC’s strong risk-adjusted capitalization and favorable operating results, as well as the support provided by its ultimate parent, Brown and Brown, Inc. [NYSE: BRO], and its exclusive reinsurance arrangement with the Federal Emergency Management Agency (FEMA). Offsetting these positive rating factors are the inherent challenges and risk related to its narrow business profile and its heavy dependence on the National Flood Insurance Program (NFIP), which is critical to its core business. The company also has some potential net risk exposure from its excess flood book. Potential changes related to NFIP or FEMA rules related to Write Your Own (WYO) Program selection practices also could pose a challenge to WNFIC. NFIP is up for renewal in September 2017. WNFIC derives significant revenue and fee-based income from its book of non-risk-bearing NFIP business, as well as from its excess flood coverage. These are expected to contribute significantly to the company’s overall profitability.

A.M. Best views WNFIC’s experienced management and corporate strategy as major factors that strengthen its ratings, given the company’s conservative underwriting, operational goals and transparency. A.M. Best also views WNFIC’s enterprise risk management (ERM) practices as adequate, given the company’s experience in this sector, its conservative risk culture and defined risk controls.

A.M. Best expects WNFIC’s future operating performance to be strong, with a stable earnings profile that should further support the efforts to control its growth and business writings, which are consistent with its capital and surplus position.

This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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