AM Best Upgrades Credit Ratings of National Guaranty Insurance Company of Vermont

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a” (Excellent) from “a-” (Excellent) of National Guaranty Insurance Company of Vermont (NGIC) (Burlington, VT). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.

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

The rating upgrades reflect a revision of NGIC’s operating performance assessment to very strong from strong. Over the last decade, NGIC has produced consistently strong underwriting and return on revenue metrics, with combined ratios that outperformed the industry and its peers by wide margins. It is AM Best’s expectation that NGIC will continue to produce favorable operating results prospectively, driven by the organization’s extensive loss controls, which have resulted in a loss-free history for the captive.

The ratings also acknowledge NGIC’s strategic role as the captive insurance company of Waste Management, Inc. (WM) [NYSE: WM], one of the leading providers of comprehensive waste management environmental services in North America. As a strategic and integral part of WM’s ERM program, it wholly funded the captive’s capitalization in the form of a demand note, and as changes in exposures necessitate, additional supplements have been provided in the form of letters of credit. Furthermore, NGIC benefits from WM’s robust risk management strategies, which enable it to support a portion of WM’s financial assurance program efficiently and appropriately.

NGIC has a limited business profile, is licensed in two states and operates in 27 states as a non-admitted insurer to meet financial assurance obligations of WM. The captive’s ERM is considered appropriate as a focused insurance company, which leverages its expertise to benefit policyholders.

The stable outlook reflects AM Best's expectation that NGIC will sustain its current level of operating profitability and continue to outperform peers while maintaining its very strong balance sheet strength assessment.

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.

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