A.M. Best Affirms Ratings of North Light Specialty Insurance Company

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.

Allstate (NYSE:ALL)
Historical Stock Chart
From May 2024 to Jun 2024