AM Best Affirms Credit Ratings of NiSource Insurance Corporation, Inc.

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of NiSource Insurance Corporation, Inc. (NICI) (Salt Lake City, UT). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect NICI’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

NICI’s balance sheet strength assessment of very strong reflects the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), as well as the company’s strong liquidity measures, conservative investment philosophy and history of favorable reserve development. The combined and operating ratios have outperformed the industry averages, due to a low underwriting expense structure and loss ratios trending favorably. Since inception, NICI has generated profitability at levels generally equal to or better than its industry peers. Over the years, retained earnings have bolstered NICI’s balance sheet strength with future earnings expected to produce more of the same, complements of its niche captive orientation, risk management expertise and conservative underwriting criteria; consequently, the stable outlooks.

NICI is a single-parent captive insurer wholly owned by NiSource Inc., providing all-risk property, workers’ compensation, excess general and automobile liability, medical stop-loss, long-term disability and group life insurance for the parent and its affiliates. AM Best has taken a balanced view of NICI’s overall business profile, which albeit limited in scope, maintains inherent advantages as a single-parent captive with immediate access to business and resources along with the broader financial wherewithal of its ultimate parent.

Downward rating pressure could result from a decline in the company’s operating performance, an increase in underwriting leverage or an outsized loss event that triggers a sudden decline in risk-adjusted capitalization. In addition, rating pressure could occur if there are any sudden and material changes in the financial and credit profile of the parent.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.