OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has removed from under review with negative implications and downgraded the Financial Strength Rating to A (Excellent) from A+ (Superior) and the Long-Term Issuer Credit Ratings to “a+” from “aa-” for the members of NYCM Insurance Group, which are New York Central Mutual Fire Insurance Company and A. Central Insurance Company. The companies operate under a pooling arrangement and are domiciled in Edmeston, NY. The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings were placed under review with negative implications on Oct. 13, 2017, following the release of the updated Best’s Credit Rating Methodology (BCRM). The current rating actions follow the completion of A.M. Best’s analysis of NYCM Insurance Group under the updated BCRM.
The ratings reflect NYCM Insurance Group’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
NYCM Insurance Group’s balance sheet strength is supported by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), reflective of moderate underwriting leverage and its prudent investment risk profile and enhanced by consistent surplus growth. Additionally, strong liquidity measures enhanced with generally positive operating cash flows augment the balance sheet strength, which is offset somewhat with nominal adverse loss reserve development in six out of the past nine accident years, primarily driven by private passenger auto liability, largely an industry-wide issue. NYCM Insurance Group’s operating performance on a five- and ten-year average basis is adequate, with key operating metrics that are similar with its peer averages, and the group’s combined ratio averages slightly below break-even. Net income was generated in nine out of the past ten years, largely due to solid net investment income and other income, either complementing or offsetting variable net underwriting results.
NYCM Insurance Group’s business profile is neutral. Although there is geographical concentration in New York, which exposes results to weather-related events and to regulatory challenges, the group maintains a prominent market position supported with a strong and tenured management team with a long-standing track record. The group also benefits from appropriate ERM, including a developed risk management framework and comprehensive reinsurance program.
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