OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of New York Municipal Insurance Reciprocal (NYMIR) (Albany, NY).
The revised outlooks reflect the corrective actions taken by NYMIR management over the past few years, which have resulted in restoring operating profitability to historical levels while maintaining strong risk-adjusted capitalization that is supportive of the Credit Ratings (ratings). The ratings were downgraded, and the outlooks were revised to negative from stable in 2015 due to two consecutive years of poor operating performance.
The ratings reflect NYMIR’s strong risk-adjusted capitalization, long-standing market presence, and its restored profitability in 2015 and 2016. The ratings are supported by the company’s continuous growth in membership and management’s expertise in the niche insurance needs of municipalities in New York.
Partially offsetting rating factors include a limited universe of potential members, geographical concentration and its degree of dependence on its program administrator. Furthermore, NYMIR’s investment performance has lagged the industry despite an increase in common stock leverage beginning in 2014.
There is an ongoing effort to implement a series of changes to the company’s enterprise risk management (ERM) structure with many initiatives recently being approved by the Board of Directors. NYMIR successfully developed and completed an initial ERM risk assessment tool and policy during the course of 2016, which will take effect in 2017.
Negative rating action could occur if there is significant decline in operating results or risk-adjusted capitalization materially weakens.
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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