AM Best Revises Outlooks to Positive for National Guaranty Insurance Company of Vermont
June 20 2024 - 12:27PM
Business Wire
AM Best has revised the outlooks to positive from stable
and affirmed the Financial Strength Rating of A- (Excellent) and
the Long-Term Issuer Credit Rating of “a-” (Excellent) of National
Guaranty Insurance Company of Vermont (NGIC) (Burlington, VT).
The Credit Ratings (ratings) reflect NGIC’s balance sheet
strength, which AM Best assesses as very strong, as well as its
strong operating performance, limited business profile and
appropriate enterprise risk management (ERM).
The revision of the outlooks to positive recognizes NGIC’s
favorable operating results over the past decade demonstrated by
consistently strong underwriting and return on revenue metrics. The
company has produced exceptional annual, five- and 10-year average
combined ratios that outperformed the industry and its peers by
wide margins. AM Best’s expectation is that NGIC will continue to
produce favorable operating results prospectively, driven by the
organization’s extensive loss controls, which have resulted in a
loss-free history for the captive. The positive outlook also
considers the continuation of NGIC’s very strong balance sheet,
with organic surplus growth, and the company maintaining its
strongest level of risk-adjusted capitalization, as measured by
Best’s Capital Adequacy Ratio (BCAR).
The ratings also reflect NGIC’s strategic role as the captive
insurance company of Waste Management, Inc. (WM) [NYSE: WM], a
leading provider of comprehensive waste management environmental
services in North America. As a strategic and integral part of WM’s
ERM program, the parent wholly funded the captive’s capitalization
in the form of a demand note that generates net investment income
to augment surplus annually. Further supplements have been provided
in form of letters of credit as changes in exposures warrant. NGIC
benefits from WM’s robust risk management strategies, which enable
it to support a portion of WM’s financial assurance program
efficiently and appropriately.
NGIC has a limited business profile and is licensed in two
states and operates in 27 states as a non-admitted insurer to meet
financial assurance obligations of its parent. The captive’s ERM is
considered appropriate as a focused insurance company that
leverages its expertise to benefit policyholders.
AM Best remains the leading rating agency of alternative risk
transfer entities, with more than 200 such vehicles rated in the
United States and throughout the world. For current Best’s Credit
Ratings and independent data on the captive and alternative risk
transfer insurance market, please visit
www.ambest.com/captive.
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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Kourtnie Beckwith Senior Financial Analyst +1 908 882
1649 kourtnie.beckwith@ambest.com
Adrienne Stark Associate Director +1 908 882 2336
adrienne.stark@ambest.com
Christopher Sharkey Associate Director, Public Relations +1
908 882 2310 christopher.sharkey@ambest.com
Al Slavin Senior Public Relations Specialist +1 908 882
2318 al.slavin@ambest.com