Best’s News & Research Service - November 19, 2014 01:42 PM (EST)
A.M. Best Upgrades Ratings of Nations Insurance Company
Oldwick //BestWire// - A.M. Best has upgraded the financial strength rating to B+ (Good) from B (Fair) and the issuer credit rating to "bbb-" from "bb+" of Nations Insurance Company (NIC) (Anaheim, CA). The outlook for both ratings has been revised to stable from positive.
The rating upgrades recognize NIC's enhanced risk-adjusted capitalization and improved underwriting trends. In addition, the ratings consider the company's conservative investment philosophy, tempered premium growth and management's local market knowledge.
These positive rating factors are somewhat offset by NIC's variable underwriting performance in previous years and limited business profile. As a single-state nonstandard private passenger automobile writer in California, the company also remains susceptible to adverse changes in the judicial, legislative and economic environments, as well as increased competition.
Positive rating movement may result from continued improvement in underwriting and operating performance trends in conjunction with sustained improvement in risk-adjusted capitalization. However, negative rating actions could result if underwriting performance falls materially short of A.M. Best's expectations or there is a significant erosion of capital.
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 www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
- Risk Management and the Rating Process for Insurance Companies
- Understanding BCAR for Property/Casualty Insurers
- Catastrophe Analysis in A.M. Best Ratings
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