A.M. Best Upgrades Issuer Credit Rating of New York Schools Insurance Reciprocal [Manufacturing Close – Up]

A.M. Best Co. has upgraded the issuer credit rating to "a+" from "a" and affirmed the financial strength rating of A (Excellent) of New York Schools Insurance Reciprocal (NYSIR) (Albany, NY).

The outlook for both ratings is stable.

The ratings reflect NYSIR's excellent risk-adjusted capitalization, long-standing market presence and positive operating results over the past five years that have consistently outperformed the commercial property and casualty industry, as well as its high policyholder retention. NYSIR benefits from its status as a tax- exempt, non-profit reciprocal. Partially offsetting these positive rating factors is the company's limited geographic spread of risk as a single state insurer.

NYSIR's strong risk-adjusted capital position is derived from its moderate underwriting leverage and conservative investment risk profile. The company's combined ratio slightly outperformed its industry composite on a five-and 10-year average basis. This reflects management's strategies of maintaining adequate rate levels, providing long-term, stable risk financing and risk management vehicles to all eligible New York State schools.

A.M. Best views NYSIR's ratings as well positioned at the current rating level.

Partially offsetting these strengths is the potential for significant fluctuations in NYSIR's underwriting income given its geographic concentration of property risks and exposure to weather- related losses. The ratings also reflect NYSIR's proven track record of providing quality products to its base of insureds, thereby maintaining high policyholder retention even during the soft commercial insurance market cycles.

Negative rating actions could occur if the capitalization and/or operating performance at NYSIR falls markedly short of A.M. Best's expectations, including a significant deterioration in its loss trends, material operational and performance issues and any sudden and unforeseen disruption in its distribution.

Negative rating pressure also could occur if the business profile of the company changes materially.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides an explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process.

A.M. Best Company is an insurance rating and information source.

More Information:

http://www.ambest.com

Best's Credit Rating Methodology:

http://www.ambest.com/ratings/methodology

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