A.M. Best Co. reported it has affirmed the financial strength rating (FSR) of “A” (Excellent) and assigned an issuer credit rating (ICR) of “a” to National Lloyds Insurance Company (National Lloyds). Concurrently, A.M. Best has upgraded the FSR to ‘”A-” (Excellent) from “B++” (Good) and assigned an ICR of “a-” to American Summit Insurance Company (American Summit), an affiliate of National Lloyds. The outlook for all ratings is stable.
Both companies are subsidiaries of Waco, Texas-based NLASCO Inc., which is owned by a subsidiary of Affordable Residential Communities Inc. (ARC).
Best said the ratings reflect National Lloyds’ favorable risk-adjusted capitalization, continued solid underwriting performance and local market expertise. These positive rating factors are somewhat offset by National Lloyds’ geographic concentration of risk primarily in the Texas marketplace and elevated underwriting expense ratio.
The rating actions on American Summit reflect the company’s favorable risk-adjusted capitalization, geographic spread of risk in moderately catastrophe prone areas and successful underwriting performance. These positive rating factors are somewhat offset by American Summit’s elevated underwriting expense ratio and low investment yields.
In addition, the ratings reflect A.M. Best’s expectation that underwriting performance and capitalization will continue to trend favorably for both entities. Also contemplated in the rating decision was the potential financial flexibility that exists from ARC.
Source: A.M. Best
Topics AM Best
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