Best’s News & Research Service - March 25, 2022 01:25 PM (EDT)
AM Best Affirms Credit Ratings of NiSource Insurance Corporation, Inc.
- March 25, 2022 01:25 PM (EDT)
Oldwick //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 very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
NICI is a single-parent captive insurer wholly owned by NiSource Inc., and accepts insurance risks from NiSource and its affiliates, providing all-risk property, workers’ compensation, excess general and automobile liability, medical stop-loss, long term disability and group life insurance.
Since inception, NICI has generated profitability at levels generally equal to or better than its industry peers. Over the years, retained earnings have bolstered NICI’s balance sheet strength with future earnings expected to produce more of the same, complements of its niche captive orientation, risk management expertise and conservative underwriting criteria; hence, the stable outlooks.
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.
Downward rating pressure could result from a decline in the company’s operating performance, an increase in underwriting leverage or an outsized loss event that triggers a sudden decline in risk-adjusted capitalization. In addition, rating pressure could occur if there are any sudden and material changes in the financial and credit profile of the parent.
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, Best’s Performance Assessments, 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.