AM Best Revises Outlooks to Stable for Nationwide Mutual Insurance Company and Its Property/Casualty Subsidiaries; Affirms Credit Ratings for Affiliates

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa-” of the members of Nationwide Group (Nationwide). Concurrently, AM Best has affirmed the FSR of A+ (Superior) and Long-Term ICR of “aa-” of Nationwide Life Insurance Company and its subsidiaries, Nationwide Life and Annuity Insurance Company and Jefferson National Life Insurance Company. These companies are the key life/annuity subsidiaries of Nationwide Financial Services Inc. (NFS), and collectively are known as Nationwide Life Group. Additionally, AM Best has affirmed the Long-Term ICR of “a-” of NFS and all of its existing Long- and Short-Term Issue Credit Ratings (Long-Term IR; Short-Term IR). The outlook of these Credit Ratings (ratings) is stable. At the same time, AM Best has assigned a Long-Term IR of “a-” to the $1 billion 3.9% 30-year senior unsecured notes recently issued by NFS (guaranteed by Nationwide Mutual Insurance Company). The outlook assigned to this rating is stable.

AM Best also has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” of Harleysville Life Insurance Company (HLIC). The outlook of these ratings remains stable.

In addition, AM Best has revised the outlooks to stable from negative and affirmed the Long-Term IRs of “a” of five surplus notes totaling $2.2 billion issued by Nationwide Mutual Insurance Company (Nationwide Mutual). AM Best also has affirmed the FSR of B+ (Good) and the Long-Term ICR of “bbb-” of Nationwide Indemnity Company (NIC), the group’s run-off entity for asbestos and environmental claims. The outlook of these ratings remains stable. Lastly, AM Best has affirmed the FSR of B++ (Good) and the Long-Term ICR to “bbb” of Titan Insurance Company (Titan). The outlook of these ratings remains stable. All companies are headquartered in Columbus, OH, unless otherwise specified. (See link below for a detailed listing of all the companies and ratings.)

The ratings of Nationwide reflect its balance sheet strength, which AM Best categorizes as strongest, as well as its marginal operating performance, favorable business profile and appropriate enterprise risk management (ERM). These ratings also consider the breadth of resources of the organization as reflected in the consolidated results of the enterprise.

The ratings capture a view of the less-than-optimal underwriting results in the core property/casualty lines of business. While Nationwide has implemented multiple strategic initiatives to address the underwriting performance, the benefit of these plans have yet to gain significant traction. Risk-adjusted capital remains solid against significant weather-related events and natural catastrophe-related losses, though loss frequency and severity trends in recent years continue to drag on profitability. Strong investment results have moderated the underwriting performance over the last several years.

The ratings of Nationwide Life Group reflect its balance sheet strength, which AM Best categorizes as strongest, as well as its strong operating performance, favorable business profile and appropriate ERM.

The balance sheet strength is supported by the strongest level of risk-adjusted capitalization, a well-diversified and high-quality investment portfolio and strong financial flexibility. However, AM Best notes that the quality of capital is diminished by surplus notes issued to the parent holding company and two captive insurers to support redundant reserves and reduce volatility related to variable annuities with guaranteed benefits. The company’s operating performance has benefited from favorable diversification of the business profile and strong market positions, providing consistently strong earnings and return metrics.

The ratings of HLIC reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its marginal operating performance, limited business profile and appropriate ERM. The ratings also reflect the operational and financial support of the Nationwide organization. HLIC stopped writing new business in 2014 and its legacy business continues to run off as expected.

The ratings of NIC reflect its balance sheet strength, which AM Best categorizes as strong, as well as its marginal operating performance, very limited business profile and appropriate ERM. The ratings also reflect the operational and financial support provided by the Nationwide organization.

NIC retains its role as a receptacle for asbestos and environmental reserves within the organization. Consequently, future operating performance is restrained and there is no expectation of modification to its established role.

The ratings of Titan reflect its balance sheet strength, which AM Best categorizes as adequate, as well as its marginal operating performance, limited business profile and appropriate ERM.

Titan serves a focused target market with nuanced dynamics for the benefit of the Nationwide enterprise. The ratings reflect the support provided by the Nationwide organization across all aspects of Titan’s short-term and long-term operations on a day-to-day basis.

A complete listing of Nationwide Group’s FSRs, Long-Term ICRs and Long- and Short-Term IRs also is available.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data provider specializing in the insurance industry. The company does business in more than 100 countries. Headquartered in Oldwick, NJ, AM Best has offices in cities around the world, including London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Robert Raber

Associate Director – P/C

+1 908 439 2200, ext. 5696

robert.raber@ambest.com



Keith Behrmann

Senior Financial Analyst – L/H

+1 908 439 2200, ext. 5733

keith.behrmann@ambest.com



Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com



Jim Peavy

Director, Public Relations

+1 908 439 2200, ext. 5644

james.peavy@ambest.com

Source: AM Best