The ratings reflect NICI’s strong risk-adjusted capitalization, history of consistently strong operating performance, sound risk management capabilities and conservative balance sheet strategies. The ratings also recognize its history of maintaining sufficient capital and financial resources to support its ongoing obligations.
These positive ratings factors are partially offset by NICI’s limited market scope, which is somewhat mitigated by its improving loss history, favorable geographic spread of risk, the history of its growing surplus position and the support of its ultimate parent, NiSource Inc. (NiSource). Additionally, while NICI depends on third parties for processing, servicing and administration, NiSource’s senior management is intimately involved in these operations.
NICI is a single parent captive insurer wholly owned by NiSource, which accepts insurance risks from NiSource and its affiliates, providing all risk property, workers’ compensation, general and automobile liability, long term disability and group life insurance.
NICI has consistently produced profitable net operating income each year since 2010 from underwriting and investment income. Its balance sheet strength has been bolstered through retained earnings. Over the past five years, surplus has grown significantly.
Positive ratings triggers could include sustained positive operating results and improved risk-adjusted capitalization.
Nonetheless, downward ratings pressure could result from a decline in the company’s liquidity levels, an increase in underwriting leverage or outsized catastrophe or investment losses in conjunction with a significant prolonged decline in risk-adjusted capitalization. In addition, financial issues resulting in ratings pressure on the ultimate parent could impact NICI’s ratings.
This press release relates to Credit Ratings 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. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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