CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK, N.J. - MAY 22, 2013 12:00 AM (EDT)
A.M. Best Co. has revised the outlook to stable from negative and affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit ratings (ICR) of “aa-” of the four participating property/casualty pool members and 24 reinsured affiliates of Nationwide Group (Nationwide). Additionally, A.M. Best has revised the outlook to stable from negative and affirmed the debt ratings of “a” of five surplus notes totaling $2.2 billion issued by Nationwide Mutual Insurance Company (Columbus, OH).
Concurrently, A.M. Best has upgraded the FSR to A+ (Superior) from A (Excellent) and the ICRs to “aa-” from “a+” of seven additional reinsured affiliates, which were formerly members of the Harleysville Insurance Companies pool (Harleysville). The outlook for these ratings has been revised to stable from positive. (See below for a detailed list of the companies and ratings.)
Nationwide’s ratings reflect its solid level of risk-adjusted capitalization, which continues to be supportive of its ratings. The group has reported several years of variable underwriting performance in its core lines of business, impacted primarily by weather-related losses. However, Nationwide benefits from diversified product offerings that include standard and specialty personal, commercial and surplus lines of business. The ratings and outlook further recognize Nationwide’s extensive market presence, multiple distribution channels and decentralized operational structure, which is designed to provide superior service to its agents and policyholders.
Nationwide’s management continues to face challenges in the near term to generate positive underwriting results necessary to continue to strengthen the group’s capital position. Although the organization’s surplus position has improved overall in recent years, severe weather-related losses have continued to hamper results.
The upgrading of the ratings for the former members of Harleysville reflects their recent inclusion into the Nationwide pooling agreement.
Regarding future rating movement, continued negative underwriting performance in the near term, leading to deterioration in Nationwide’s risk-adjusted capitalization, would likely result in additional downward rating pressure.
A.M. Best also has affirmed the FSR of B+ (Good) and ICR of “bbb-” of Nationwide Indemnity Company (NIC) (Columbus, OH). The outlook for both ratings is stable. NIC is the group’s run-off entity, primarily for asbestos and environmental claims.
The FSR of A+ (Superior) and ICRs of “aa-” have been affirmed for Nationwide Group and its following property/casualty pool members and reinsured affiliates:
· Farmland Mutual Insurance Company
· Nationwide Mutual Insurance Company
· Nationwide Mutual Fire Insurance Company
· Scottsdale Insurance Company
· ALLIED Property and Casualty Insurance Company
· AMCO Insurance Company
· Colonial County Mutual Insurance Company
· Crestbrook Insurance Company
· Depositors Insurance Company
· Freedom Specialty Insurance Company
· National Casualty Company
· Nationwide Affinity Insurance Company of America
· Nationwide Agribusiness Insurance Company
· Nationwide Assurance Company
· Nationwide General Insurance Company
· Nationwide Insurance Company of America
· Nationwide Lloyds
· Nationwide Property and Casualty Insurance Company
· Scottsdale Indemnity Company
· Scottsdale Surplus Lines Insurance Company
· Titan Indemnity Company
· Titan Insurance Company
· Victoria Automobile Insurance Company
· Victoria Fire & Casualty Company
· Victoria National Insurance Company
· Victoria Select Insurance Company
· Victoria Specialty Insurance Company
· Western Heritage Insurance Company
The FSR has been upgraded to A+ (Superior) from A (Excellent) and the ICRs to “aa-” from “a+” for the following former members of the Harleysville Insurance Companies pool property/casualty reinsured affiliates:
· Harleysville Insurance Company of New Jersey
· Harleysville Insurance Company of New York
· Harleysville Insurance Company
· Harleysville Lake States Insurance Company
· Harleysville Pennland Insurance Company
· Harleysville Preferred Insurance Company
· Harleysville Worcester Insurance Company
The following debt ratings have been affirmed:
Nationwide Mutual Insurance Company—
- “a” on $400 million variable rate surplus notes, due 2024
- “a” on $400 million 8.25% surplus notes, due 2031
- “a” on $300 million 7.875% surplus notes, due 2033
- “a” on $400 million 6.6% surplus notes, due 2034
- “a” on $700 million 9.375% surplus notes, due 2039
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.
A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.