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FOR IMMEDIATE RELEASE
OLDWICK - JULY 06, 2016 10:58 AM (EDT)
A.M. Best has removed from under review with positive implications and upgraded the issuer credit rating to “bbb+” from “bbb” of Nevada General Insurance Company (Nevada General) (Las Vegas, NV). Concurrently, A.M. Best has affirmed Nevada General’s financial strength rating of B++ (Good). The outlook assigned to each rating is positive.
The ratings reflect the recent completion of Western National Mutual Insurance Company’s (Western) acquisition of Nevada General. As part of larger more diverse conglomerate of companies, Nevada General will benefit from operational and financial guidance. This guidance will provide Nevada General the necessary tools and expertise to improve profitability.
The positive outlooks reflect A.M. Best’s expectation that Nevada General will be further integrated into Western in the near term.
These positive rating factors are partially offset by Nevada General’s deteriorated risk-adjusted capitalization, although adequate, and adverse operating results. In the most recent years, adverse operating results have been driven by unfavorable underwriting results and adverse reserve development coupled with a sharp increase in premium volume. As a result, overall risk-adjusted capital has declined, and returns on revenue and equity are negative. In addition, the combined ratio reached a five-year high at year-end 2015. As noted previously, A.M. Best anticipates that Nevada General’s risk-adjusted capitalization and most importantly, operating performance, will improve under new ownership.
This press release relates to rating(s) 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.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.