Best’s News & Research Service - May 09, 2018 02:35 PM (EDT)
A.M. Best Revises Outlooks to Stable for Nations Insurance Company
- May 09, 2018 02:35 PM (EDT)
Oldwick //BestWire// - A.M. Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating of “bb” of Nations Insurance Company (Nations) (Cerritos, CA).
The Credit Ratings (ratings) of Nations reflect its balance sheet strength, which A.M. Best categorizes as adequate, as well as its adequate operating performance, limited business profile and marginal enterprise risk management.
The revised outlook to stable from negative is based on the recent improvement of Nations’ operating performance and risk-adjusted capitalization, driven by increased underwriting earnings and investment income, which led to solid surplus growth. In addition, Nations implemented a 50% quota share reinsurance contract effective Jan. 1, 2017, which significantly reduced its net underwriting leverage. This quota share reinsurance was increased to 60% effective Jan. 1, 2018. Furthermore, Nations has implemented rate increases in recent years, which have enhanced net underwriting income, and increased investment allocation to long-term bonds from short-term investments, which has increased net investment yield and net investment income.
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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