A.M. Best Co. has assigned a financial strength rating of ‘B+’ (Good) and issuer credit rating of “bbb-” to National Contractors Insurance Company, Inc., RRG (NCIC), which is headquartered in Bigfork, Montana. The outlook for both ratings is stable.
Best said the “ratings reflect NCIC’s adequate capitalization and experienced management team as well as its solid business plan, which is also weighed into the profitability metrics of the rating.”
However, Best noted that the “company’s dependence on reinsurance in order to offer its program, volatile operating results in the first three years of business, high expense ratio and concentration of geographic risk,” should be taken into account as offsetting factors.
Best also cited the “execution risk associated with the implementation of NCIC’s business plan” as an additional factor.
On a more positive note, Best confirmed that NCIC has met the rating agency’s “stringent requirements for new company formations.” In addition Best noted that NCIC’s ratings “reflect its ability to meet higher capitalization requirements, which mandate a more conservative level of risk-based capital to support its ratings.”
Best said it would continue to monitor NCIC’s progress “in meeting the assumptions of its business plan and also the company’s performance on a quarterly basis. Any material negative deviation from the business plan in terms of management, earnings, capitalization or risk profile could result in negative rating pressure.”
Source: A.M. Best – www.ambest.com