A.M. Best Affirms Ratings of North Light Specialty Insurance Company
December 22 2010 - 11:15AM
Business Wire
A.M. Best Co. has affirmed the financial strength rating
of A (Excellent) and issuer credit rating of “a” of North Light
Specialty Insurance Company (North Light). The outlook for both
ratings is stable. North Light is a wholly owned subsidiary of
Allstate Insurance Company (AIC), with both companies having
The Allstate Corporation (Allstate) [NYSE: ALL] as their
ultimate parent. All companies are domiciled in Northbrook, IL.
The ratings are based on North Light’s solid risk-adjusted
capitalization and the operating support provided by the affiliates
of Allstate Insurance Group. This operating support is
demonstrated by a 100% quota share reinsurance contract with AIC
for its countrywide business, excluding Florida, although North
Light does not currently write business in Florida. Effective
October 2010, North Light established a 100% quota share
reinsurance agreement with AIC for policies written in New Jersey.
Operating support also is provided by the same underwriting,
pricing and claims infrastructure that is used by Allstate
Insurance Group.
North Light offers personal lines property coverage on a
non-admitted basis for unique, under served customer segments or
those residing in high risk markets such as hurricane, wildfire or
earthquake-prone regions. Therefore, the positive rating attributes
are partially offset by North Light’s inherent gross catastrophe
exposure and execution risk with regard to underwriting, pricing
and claims functions on this catastrophe exposed business.
Moreover, the gross catastrophe exposure is reduced to a nominal
level on a net basis through quota share reinsurance currently
provided by AIC. In addition, since North Light’s inception in
October 2008, direct premium growth has accelerated on a relative
basis but remains tempered due to its conservative risk management
practices and underwriting criteria, combined with competitive
market conditions.
The principal methodology used in determining these ratings is
Best’s Credit Rating Methodology -- Global Life and Non-Life
Insurance Edition, which provides a
comprehensive explanation of A.M. Best’s rating process and
highlights the different rating criteria employed. Additional key
criteria utilized include: “Risk Management and the Rating Process
for Insurance Companies”; “Understanding BCAR for Property/Casualty
Insurers”; “Catastrophe Risk Management Incorporated Within the
Rating Analysis”; and “Rating Members of Insurance Groups.”
Methodologies can be found at
www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world’s oldest and
most authoritative insurance rating and information source. For
more information, visit www.ambest.com.
Copyright © 2010 by A.M. Best Company,
Inc. ALL RIGHTS RESERVED.
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