AM Best Affirms Credit Ratings of National General Group Members & Parent; Adds National Farmers Union Property & Casualty Co...
September 05 2019 - 11:10AM
Business Wire
AM 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, AM 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 a complete list of ratings below.
Concurrently, AM Best has removed from under review with
negative implications and downgraded the FSR to A- (Excellent) from
A (Excellent) and the Long-Term ICR to “a-” from “a+” of National
Farmers Union Property and Casualty Company (National Farmers
Union) (Winston-Salem, NC). The outlook assigned to these ratings
is stable. National Farmers Union has a reinsurance agreement with
Integon National Insurance Company, and the rating actions reflect
the ratings of National Farmers Union’s new affiliated
reinsurer.
The ratings reflect National General Group’s balance sheet
strength, which AM 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 and 2018
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, with stable outlooks 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 $165 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 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 Understanding
Best’s Credit Ratings. For information on the proper media use of
Best’s Credit Ratings and AM Best press releases, please view Guide
for Media - Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.
AM 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 © 2019 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/20190905005740/en/
Lewis DeLosa, CFA Financial Analyst +1 908 439
2200, ext. 5529 lewis.delosa@ambest.com Jennifer
Marshall Director +1 908 439 2200, ext. 5327
jennifer.marshall@ambest.com Christopher Sharkey Manager,
Public Relations +1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com Jim Peavy Director, Public
Relations +1 908 439 2200, ext. 5644
james.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