A.M. Best Affirms Credit Ratings of National General Holdings Corp. and Subsidiaries
October 09 2018 - 2:29PM
Business Wire
A.M. Best has affirmed the Long-Term Issuer Credit Rating
(Long-Term ICR) of “bbb-” of National General Holdings Corp. (NGHC)
(headquartered in New York, NY) [NASDAQ:NGHC] and all of the
Long-Term Issue Credit Ratings (Long-Term IRs) and indicative
Long-Term IRs of NGHC securities. At the same time, A.M. Best has
affirmed the Financial Strength Rating (FSR) of A- (Excellent) and
the Long-Term ICRs of “a-” of Integon National Insurance Company
(Winston-Salem, NC) and its reinsured affiliates, as well as of
National General Re Ltd. (Hamilton, Bermuda). The outlook of
these Credit Ratings (ratings) is stable. All of the operating
insurance entities are collectively referred to as National General
Group. See complete list of ratings below.
The ratings reflect National General Group’s balance sheet
strength, which A.M. Best categorizes as strong, as well as its
adequate operating performance, neutral business profile and
appropriate enterprise risk management (ERM).
The assessment of balance sheet strength reflects National
General Group’s risk-adjusted capitalization, the solid investment
portfolio and the strength of the group’s reinsurance panel, as
well as its generally favorable loss reserve development pattern.
These positive factors are offset by a modest amount of adverse
development in the group’s automobile loss reserves in recent
years, and by the substantial level of goodwill and intangibles on
NGHC’s balance sheet.
The group’s operating performance is derived from its loss
ratio, which consistently outperforms those of its non-standard
automobile composite peers. While the group’s statutory
underwriting and operating results modestly underperformed the peer
group over the past five years, the group’s profitability on a GAAP
basis (which considers the benefit of the group’s fee-based
revenues) is significantly better than its statutory performance
metrics. In addition, the group’s returns on revenue and equity
generally outperform its composite average, although 2017 results
were impacted negatively by catastrophes and severe weather.
National General Group’s business profile assessment reflects
its diverse operations within the United States, which are
concentrated in personal lines, primarily automobile. The saturated
nature of the group’s target markets has resulted in most of its
significant growth coming through acquisitions historically. NGHC
has a developed ERM framework, and its risk management capabilities
are generally in line with its risk profile.
Adjusted debt leverage at NGHC is in line with guidelines for
its current rating, as is its interest coverage. Debt to tangible
capital metrics are elevated relative to peers, reflecting the
goodwill and intangibles associated with the enterprise’s
acquisition strategy. Given the income generation of these
acquisitions, the capital position is expected to increase over
time, creating an improved level of tangible to total capital.
The FSR of A- (Excellent) and the Long-Term ICRs of “a-” have
been affirmed for the following insurance subsidiaries of National
General Holdings Corp.:
- New South Insurance Company
- National General Assurance Company
- Integon National Insurance Company
- Integon Indemnity Corporation
- Integon General Insurance
Corporation
- MIC General Insurance Corporation
- National General Insurance Company
- Standard Property & Casualty
Insurance Company
- National Health Insurance Company
- Integon Casualty Insurance Company
- Imperial Fire and Casualty Insurance
Company
- Integon Preferred Insurance
Company
- National General Insurance Online
Inc.
- National General Premier Insurance
Company
- National General Re Ltd.
- Century-National Insurance Company
- Agent Alliance Insurance Company
- Direct Insurance Company
- Direct General Insurance Company
- Direct General Insurance Company of
Mississippi
- Direct National Insurance Company
- Direct General Life Insurance
Company
The following Long-Term IRs have been affirmed:
National General Holdings Corp.—
-- “bbb-” on $100 million 6.75% senior unsecured notes, due
2024
-- “bbb-” on $250 million 6.75% senior unsecured notes, due
2024
-- “bb+” on $100 million 7.625% subordinated notes, due 2055
-- “bb” on $200 million 7.5% preferred stock
-- “bb” on $150 million 7.5% preferred stock
-- “bb” on $55 million 7.5% preferred stock
The following indicative Long-Term IRs have been affirmed:
National General Holdings Corp.—
-- “bbb-” on senior unsecured debt
-- “bb+” on subordinated debt
-- “bb” on preferred stock
-- “bb” on junior subordinated debt
This press release relates to Credit Ratings that have been
published on A.M. 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 A.M.
Best’s Recent Rating Activity web page. For
additional information regarding the use and limitations of Credit
Rating opinions, please view Understanding Best’s Credit
Ratings. For information on the proper media use of Best’s
Credit Ratings and A.M. Best press releases, please view
Guide for Media - Proper Use of Best’s Credit Ratings and A.M.
Best Rating Action Press Releases.
A.M. Best is a global rating agency and information provider
with a unique focus on the insurance industry. Visit
www.ambest.com for more information.
Copyright © 2018 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181009006037/en/
A.M. BestJennifer Marshall, CPCU,
ARMDirector+1 908 439 2200, ext.
5327jennifer.marshall@ambest.comorMichael
Lagomarsino, CFA FRMSenior Director+1 908 439 2200,
ext. 5810michael.lagomarsino@ambest.comorChristopher
SharkeyManager, Public Relations+1 908 439 2200, ext.
5159christopher.sharkey@ambest.comorJim
PeavyDirector, Public Relations+1 908 439 2200, ext.
5644james.peavy@ambest.com
National General (NASDAQ:NGHC)
Historical Stock Chart
From Jun 2024 to Jul 2024
National General (NASDAQ:NGHC)
Historical Stock Chart
From Jul 2023 to Jul 2024