The Credit Ratings (ratings) reflect NAC’s excellent level of risk-adjusted capitalization, favorable operating performance since its inception and experienced management team. The ratings also acknowledge management’s prudent operating philosophy, adherence to adequate pricing and reserving discipline. The ratings also consider the historical performance of business produced by its parent company,
The positive rating factors are somewhat offset by NAC’s relatively limited operating experience, and the group’s significant business and geographic concentration risk; operating predominately as a workers’ compensation insurer with limited geographic spread that exposes operations to regulatory, judicial, legislative and competitive risks. In
Additional offsetting rating factors include challenging market conditions in the workers’ compensation line of business and legislative/regulatory uncertainty in California’s workers’ compensation marketplace. In an effort to limit its concentration risk in
The members of NAC are well-positioned at the current rating level. However, negative rating actions could result if operating performance falls markedly short of A.M. Best’s expectations, if there is a considerable deterioration in the group’s risk-adjusted capitalization, the group’s business profile suffers as a result of reputation damage or if
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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