A.M. Best Co. assigned an “A-” financial strength rating (FSR) to Nonprofits’ Insurance Alliance of California (NIAC) and “B++” ratings to Alliance of Nonprofits for Insurance, Risk Retention Group (ANI-RRG), Vermont, and National Alliance of Nonprofits (NANI), Vermont.
All companies are members of the Nonprofits Insurance Alliance Group (NIA Group). NIAC is a nonprofit, tax-exempt insurance pool that provides liability coverages to the nonprofit sector in California. NIAC’s captive affiliate, ANI-RRG, provides the same range of liability coverages to nonprofit organizations in states other than California. NANI is also an affiliate captive that reinsures NIAC and ANI-RRG. The companies’ relationships are through shared governance, not ownership.
A.M. Best indicated that NIAC’s rating reflects the pool’s sound capitalization, solid operating profitability and conservative loss reserving. The pool also benefits from its strong market position, currently insuring more than 2,740 nonprofits in California, with a steadily growing book of business. Other positive rating factors include the pool’s tax-exempt status, strong member retention derived from its expanding products and services, and proactive loss control programs.
The rating also reflects NIAC’s recent business expansion through affiliate and non-affiliate insurance entities, which will enable the NIA Group to diversify geographically (through ANI-RRG), offer additional lines of coverage and provide stability through an effective reinsurance program (NANI).
These positive rating factors are partially offset by the potential for volatility in its liability coverages and the pool’s specialty market focus in California, which makes it susceptible to competition risk and changes in regulation. However, the volatility is somewhat mitigated by conservative reserve practices and prudent reinsurance protection on excess layers. Additionally, membership in the pool is increasing, and member retention is very high due to historically stable rates and high quality services.
Topics California
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