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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MAY 25, 2007 12:00 AM (EDT)
A.M. Best Co. has affirmed the financial strength rating (FSR) of B+ (Good) and assigned an issuer credit rating (ICR) of "bbb-" to North Sea Insurance Company (NSIC) (Valley Stream, NY). The outlook for the FSR has been revised to stable from negative, while the outlook assigned to the ICR is stable.
The ratings reflect NSIC's adequate capitalization, improved operating performance and solid balance sheet liquidity. The ratings also take into account various corrective actions that the company has instituted over the years, which include enhanced systems to monitor, track and price exposures.
These positive rating factors are largely offset by NSIC's volatile operating results over the prior five years, high expense ratio and the challenges associated with being geographically concentrated in the New York metropolitan region. NSIC's geographic concentration exposes it to the highly litigious nature within New York City and to catastrophic events (natural and man-made).
Nevertheless, the revised outlook reflects the company's improved risk-adjusted capital position driven by operating earnings and lower underwriting leverage in 2006.
Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors.