AM Best Upgrades Issuer Credit Ratings of the Main Operating Subsidiaries of Nagico Holdings Limited

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb+” from “bbb” and affirmed the Financial Strength Rating (FSR) of B++ (Good) of the two operating subsidiaries of Nagico Holdings Limited: National General Insurance Corporation (NAGICO) N.V. (St. Maarten) and Nagico Insurance Company Limited (Anguilla). These companies collectively are referred to as NAGICO Group or the group. The outlook of the Long-Term ICR has been revised to stable from positive, while the outlook for FSR remains stable.

The ratings of NAGICO Group reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The very strong balance sheet strength assessment is based on supportive risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), which is at the strongest level following a quick recovery from the impact of hurricanes Irma and Maria in 2017. In addition, a major factor in the assessment of the balance sheet strength includes the group’s significant reliance on highly rated reinsurers to protect shareholder equity against catastrophic events like the aforementioned hurricanes, which NAGICO Group has a material exposure to in the Caribbean. Furthermore, its partnership with Peak Reinsurance Company Limited is expected to continue to produce growth opportunities and better asset and investment management, as well as capital support.

The group’s earnings have generally been positive, despite average underwriting ratios exceeding and profitability metrics being lower than most other Caribbean property/casualty insurers that AM Best rates. Nevertheless, earnings have contributed to surplus growth in most years and those contributions are expected to continue as management remains focused on adequate-but-competitive pricing and less exposure to hurricanes and natural disasters in its property book.

The group’s neutral business profile is predicated on the diversification between the products and lines of business that it offers its policyholders, being property, motor, marine and liability coverages, as well as life and health insurance. Moreover, NAGICO Group produces and distributes its business through select agents and brokers in 21 territories in the Caribbean, and is among the leaders in several of its primary markets. However, these benefits are offset in part by its overall catastrophe exposure, weakened economic conditions and moderate to very high country risk throughout the Caribbean.

The stable outlooks reflect AM Best’s expectation that the balance sheet strength will be maintained at the very strong level, supported by adequate operating performance over the long-term with no significant changes in the business profile.

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 Understanding 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 rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.