OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Ratings of “bbb+” 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 these Credit Ratings (ratings) 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 reflects the group’s supportive risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). 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 natural catastrophes, which NAGICO Group has a material exposure to in the Caribbean. Furthermore, AM Best expects the group’s partnership with Peak Reinsurance Company Limited to continue producing growth opportunities and better asset and investment management, as well as capital support.
The group’s earnings generally have been profitable, despite five-year average underwriting ratios and return metrics that do not compare favorably with most other Caribbean property/casualty insurers that AM Best rates. The group’s profitability during this time was impacted by significant losses in 2017 as a result of hurricanes Irma and Maria. 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.
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