OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa” for GEICO Marine Insurance Company (GEICO Marine) (Chevy Chase, MD). GEICO Marine is indirectly owned by GEICO Corporation, which is a wholly owned subsidiary of National Indemnity Company (NICO). The ultimate parent is Berkshire Hathaway Inc. (Berkshire) [NYSE: BRKa and BRKb]. The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect GEICO Marine’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its marginal operating performance, favorable business profile and appropriate enterprise risk management.
The ratings reflect GEICO Marine’s supportive risk-adjusted capitalization, historical ocean marine specialty niche expertise and the explicit support provided by NICO, in the form of significant quota share reinsurance coverage, and for which GEICO Marine receives rating enhancement. The ratings also recognize the implicit commitment provided by Berkshire.
These positive rating factors are offset partially by GEICO Marine’s high investment leverage derived from its significant allocation of invested assets to unaffiliated equities, which could lead to fluctuations in its risk-adjusted capitalization due to market swings or potential stock market downturns. In addition, GEICO Marine’s underwriting performance in recent years has been negatively impacted by rapid new business growth that has pressured the company’s combined margins.
The ratings may come under pressure if capitalization weakens or if operating performance trends do not improve. A change in the company’s role or importance within the GEICO organization could result in a diminution of its business profile, also creating downward rating pressure.
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. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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