AM Best Revises Issuer Credit Rating Outlooks to Stable for NLC Insurance Companies Pool Members

OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has revised the outlooks to stable from negative for the Long-Term Issuer Credit Ratings (Long-Term ICR) and affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term ICRs of “bbb+” (Good) of New London County Mutual Insurance Company, Hingham Mutual Fire Insurance Company, Thames Insurance Company, Inc. and Danbury Insurance Company, which operate under an intercompany pooling agreement and are collectively referred to as NLC Insurance Companies Pool (NLC) (Norwich, CT). The outlook of the FSR is stable.

The Credit Ratings (ratings) reflect NLC’s balance sheet strength, which AM Best assesses as strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The revision of the Long-Term ICR outlooks to stable from negative is based on NLC’s improved risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), primarily driven by a significant reduction in net probable maximum losses and the stabilization of its surplus during the past two and half years. In the earlier part of the past five-year period, surplus volatility was driven by deteriorating net underwriting results, largely reflective of increased frequency and severity of weather-related events, adverse development in NLC’s core lines of business, and inflationary pressures that plagued the entire industry. However, beginning in 2023 and through the first half of 2025, operating results began to show improvement due to a series of initiatives implemented by management to return to profitability, namely significant rate increases across all product lines and states. The favorable trend in operating performance is expected to continue in the future easing pressure on NLC’s business profile, which AM Best assesses as neutral.

NLC’s appropriate ERM framework includes a committee led by the CEO and consists of other senior executives that collaborate on a regular basis in identifying risks and developing appropriate risk mitigation strategies. Risk tolerances and appetites have been established regarding underwriting leverage, stress scenarios and investment guidelines.

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.

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