A.M. Best Ratings Recap

Upgrade: Nodak Insurance

A.M. Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “a+” from “a” and affirmed the Financial Strength Rating (FSR) of A (Excellent) of Nodak Insurance Company (Nodak Insurance), based in Fargo, North Dakota, and its reinsured affiliate, Battle Creek Mutual Insurance Company in Battle Creek, Nebraska.

Collectively, these companies are referred to as Nodak Insurance Group (Nodak). The outlook of the Long-Term ICR has been revised to stable from positive while the outlook for the FSR remains stable.

Also, A.M. Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” of Fargo-based American West Insurance Company (American West), a wholly owned and separately rated subsidiary of Nodak Insurance. The outlook of these ratings remains stable.

Concurrently, A.M. Best has upgraded the Long-Term ICR to “bbb+” from “bbb” for Fargo-based NI Holdings Inc., a publicly traded holding company of Nodak Insurance. The outlook has been revised to stable from positive. NI Holdings owns 100 percent of Nodak Insurance.

The ratings reflect Nodak’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

Nodak has been a strong performer as a leading writer of property and casualty insurance in North Dakota while maintaining the strongest level of capitalization.

The ratings of American West reflect its balance sheet strength, which A.M. Best categorizes as very strong, adequate operating performance, limited business profile and appropriate ERM. American West’s results and risk management benefit from the support received from Nodak.

The company’s profile remains limited due to its geographic concentration of risk and limited product offerings. Business is produced in South Dakota, Minnesota and North Dakota, which subjects results to frequent and severe weather-related events.

In addition, crop results are in direct correlation with commodity pricing, which management has no control over.

Upgrade: Hartland Mutual

A.M. Best upgraded the Long-Term Issuer Credit Rating to “bbb+” from “bbb” and affirmed the Financial Strength Rating of B++ (Good) of Hartland Mutual Insurance Co. (Hartland Mutual), based in Minot, North Dakota. The outlook of these credit ratings (ratings) remains stable.

The ratings reflect Hartland Mutual’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

Aside from the harsh weather North Dakota faced in 2016, the company’s current trend in operating performance is positive, with a five-year average combined ratio that compares favorably with the personal property composite.

Due to the company’s steady surplus growth, decreasing leverage measures and generally favorable loss reserves, the company’s balance sheet also has improved over the past five years.

Hartland’s focus on rate adequacy and property inspections has assisted it in exceeding management’s projections, especially in the most current year.

The company’s concentration of property in a single state leaves results susceptible to frequent and severe weather-related events, as well as the regulatory and economic environment.

Positive Outlooks: AmeriTrust Insurance

A.M. Best revised the outlooks to positive from stable and affirmed the Financial Strength Rating (FSR) of B++ (Good) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “bbb+” for the members of the AmeriTrust Insurance Group (AmeriTrust), which operate under an intercompany reinsurance pooling agreement.

The ratings reflect AmeriTrust’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its marginal operating performance, neutral business profile and marginal enterprise risk management.

The positive outlook reflects steps taken by AmeriTrust’s new executive team to improve underwriting results and develop a sustainable long-term business plan.

A.M. Best will continue monitoring the new team’s progress against its plan.

Sustained, favorable long-term operating performance remains a key rating factor going forward.

Rating factors that could impact the outlook adversely include unfavorable operating profitability trends, outsized underwriting or investment losses and a decline in risk-adjusted capital that does not support the current rating levels.

The members of AmeriTrust Insurance Group affected by the rating actions include: Star Insurance Co.; Century Surety Co.; Savers Property and Casualty Insurance Co.; ProCentury Insurance Co.; Williamsburg National Insurance Co.; and Ameritrust Insurance Corp.

Topics Property AM Best Risk Management