OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Lexington National Insurance Corporation (Lexington National) (Stuart, FL).
The Credit Ratings (ratings) reflect Lexington National’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The revision of the outlooks to negative reflects a decline in Lexington National’s underwriting results in recent years that has resulted in underwriting and operating performance metrics falling short of the composite averages. Underwriting performance has been impacted negatively by volatility in loss experience, and an above average expense ratio driven by legal and underwriting expenses intended to mitigate losses and address various bail reform legislative efforts. Lexington National’s very strong balance sheet strength is supported by its strongest risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), which is offset somewhat by limited surplus growth due to annual stockholder dividends. The limited business profile reflects its concentration operating largely as a bail bond surety writer. AM Best views Lexington National’s ERM as appropriate for its risk profile, with close monitoring of agencies and legislative changes.
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