A.M. Best Revises Outlook to Negative for First Nonprofit Insurance Company
Business Wire, Inc. |
The revised outlook for FNIP’s ratings reflects its historically subpar operating performance and A.M. Best’s concerns that future returns may not be of sufficient strength to support the company’s current rating level. FNIP’s volatile return measures are primarily due to weak investment earnings, although underwriting results have been somewhat mixed over the past five years with weather driving losses since 2010.
Offsetting these negative rating factors are FNIP’s strong capitalization, favorable loss ratios and significant market presence in the nonprofit community. The company’s niche underwriting focus has helped it achieve favorable loss ratios, which are typically a few points below its peer composite. Despite FNIP’s very strong level of risk-adjusted capital, its ratings could be negatively impacted by continued weak operating results relative to its industry peers.
The ratings for MIC reflect its run-off status and negligible level of loss reserves. As a result, underwriting leverage is de minimus and risk-adjusted capitalization is very strong. Modest earnings are driven by the company’s investment portfolio.
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. Key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies” and “Understanding BCAR for Property/Casualty Insurers.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899,
Copyright © 2012 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.
908-439-2200, ext. 5071
[email protected]
or
908-439-2200, ext. 5626
[email protected]
or
908-439-2200, ext. 5378
[email protected]
or
908-439-2200, ext. 5644
[email protected]
Source:
Copyright: | Copyright Business Wire 2012 |
Wordcount: | 360 |
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News