Best’s News & Research Service - May 20, 2026 11:01 AM (EDT)
AM Best Affirms Credit Ratings of NiSource Insurance Corporation, Inc.
- May 20, 2026 11:01 AM (EDT)
//BestWire// - AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of NiSource Insurance Corporation, Inc. (NICI) (Salt Lake City, UT). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect NICI’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM). The company’s ratings benefit from the implicit and explicit support it receives as a strategic component of its ultimate parent, NiSource, Inc.’s (NiSource) ERM.
NICI maintains the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). The balance sheet evaluation also considers the company’s strong liquidity position, prudent reserving approach and disciplined investment strategy, as well as the financial flexibility afforded by the parent, NiSource. NICI experienced consistently favorable reserve development on a calendar-year basis during the previous 10-year period. These attributes are offset by the high retention to surplus ratio, which is reflected in the limit the captive offers the parent.
The company’s strong operating performance assessment is supported by favorable combined and operating ratios that exceed those of AM Best’s commercial casualty composite. Its solid results are driven by favorable loss ratios and a low underwriting expense structure inherent to single-parent captive companies. Leveraging its niche captive focus, risk management expertise and disciplined underwriting approach, NICI has consistently produced results that are generally on par with or outperform those of its industry peers.
NICI is a single-parent captive insurer wholly owned by NiSource, providing all-risk property, workers’ compensation, excess general and automobile liability, medical stop-loss, long-term disability, group life insurance and punitive damage coverage for the parent and its affiliates. AM Best has taken a balanced view of NICI’s overall business profile, which albeit limited in scope, maintains inherent advantages as a single-parent captive with immediate access to business and resources along with the broader financial wherewithal of its ultimate parent. NICI plays a critical role in NiSource’s overall ERM framework, supporting the parent’s objectives through insuring key risks and ultimately supporting NiSource’s financing needs.
The stable outlooks reflect AM Best’s expectation that NICI will maintain its overall balance sheet assessment, supported by risk-adjusted capitalization at the strongest level, as measured by BCAR, while continuing to maintain strong operating performance driven by sustainable operating profits and organic surplus growth insuring its parent’s insurance needs/exposures. The outlooks also reflect AM Best’s expectation that the ability and willingness of NiSource, to support its captive will not change.
AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.
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 use of Best’s Credit Ratings (BCR), Best’s Performance Assessments (PA), Best’s Preliminary Credit Assessments (PCA) and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.