Best’s News & Research Service - December 22, 2021 11:57 AM (EST)
AM Best Affirms Credit Ratings of Nationwide Mutual Insurance Company and Its Key Operating Subsidiaries
- December 22, 2021 11:57 AM (EST)
Oldwick //BestWire// - AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “aa-” (Superior) of the members of Nationwide Group (Nationwide). Concurrently, AM Best has affirmed the FSR of A+ (Superior) and Long-Term ICR of “aa-” (Superior) of Nationwide Life Insurance Company and its subsidiaries, Nationwide Life and Annuity Insurance Company and Jefferson National Life Insurance Company. These companies are the key life/annuity subsidiaries of Nationwide Financial Services Inc. (NFS), and collectively known as Nationwide Life Group. Additionally, AM Best has affirmed the Long-Term ICR of “a-” (Excellent) of NFS and all of its existing Long- and Short-Term Issue Credit Ratings (Long-Term IR; Short-Term IR). AM Best also has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” (Excellent) of Harleysville Life Insurance Company (HLIC). The outlook of these Credit Ratings (ratings) is stable.
In addition, AM Best has affirmed the Long-Term IRs of “a” (Excellent) of the surplus notes issued by Nationwide Mutual Insurance Company (Nationwide Mutual). Lastly, AM Best has affirmed the FSR of B++ (Good) and the Long-Term ICR of “bbb” (Good) of Titan Insurance Company (Titan). The outlook of these ratings is stable. All companies are headquartered in Columbus, OH, unless otherwise specified. (See link below for a detailed listing of all the companies and ratings.)
The ratings of Nationwide reflect its balance sheet strength, which AM Best assesses as strongest, as well as its marginal operating performance, favorable business profile and appropriate enterprise risk management (ERM). These ratings also consider the breadth of organization’s resources as reflected in the consolidated results of the enterprise.
Nationwide’s risk-adjusted capitalization remains more than supportive of its risk profile, and is at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). This included buffer positions against significant weather-related events and natural catastrophe-related losses. The overall balance sheet assessment also considers the growth and quality of surplus, as well as the organization’s financial flexibility. Partially offsetting this is the impact of volatility of reserves in certain lines of business. Nationwide’s ratings also reflect underwriting results that are consistently weaker than peers and industry averages in its core property/casualty lines of business. While Nationwide has implemented a wide range of strategic and operational initiatives to address the underwriting performance, the benefits of these plans have yet to gain considerable traction. AM Best notes that despite this, revenue growth has been strong and operating results are on track to be favorable to prior year through year-end 2021. Strong investment results have bolstered underwriting performance over the past several years.
The ratings of Nationwide Life Group reflect its balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favorable business profile and appropriate ERM.
The group’s balance sheet strength assessment remains anchored by its risk-adjusted capitalization at the strongest level, as measured by BCAR, as well as the organization’s overall financial strength and flexibility. AM Best notes that the group’s quality of surplus is somewhat lower given the usage of affiliated surplus notes and captive insurers, which provide support of certain redundant reserving needs within the capital structure. Nationwide Life Group’s operating performance continues to reflect its diverse product portfolio and geographic reach, with favorable sales growth across core products and strong operating results reported through the first three quarters of 2021. The organization continues to benefit from its market-leading position among retirement plan providers, as well as top 10 carrier in its core life and annuity markets.
The ratings of HLIC reflect its balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, limited business profile and appropriate ERM. HLIC stopped writing new business in 2014 and its legacy business continues to run off as expected.
The ratings of Titan reflect its balance sheet strength, which AM Best assesses as adequate, as well as its marginal operating performance, limited business profile and appropriate ERM.
The ratings reflect the support provided by the Nationwide organization across all aspects of Titan’s short-term and long-term operations on a day-to-day basis. Titan serves a focused target market with distinct dynamics for the benefit of the Nationwide enterprise.
A complete listing of Nationwide Group’s FSRs, Long-Term ICRs and Long- and Short-Term IRs also is available.
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, Best’s Preliminary Credit Assessments 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.