S&P’s affirmed its “A+” counterparty credit and financial strength ratings on Nationwide Mutual Insurance Co. and related entities. The outlook has been revised to “negative” from “stable.” Deteriorating capitalization due to weak U.S. equity markets affected the outlook, according to an S&P’s credit analyst.
However, the ratings continue to reflect Nationwide’s strong franchise in the personal property/casualty insurance sector and improving underwriting results. Partially offsetting its strengths is a weakened capital position caused by an above-average exposure to equities and the potential for adverse development of asbestos reserves.
The negative outlook reflects the weakened capital position of the organization, which S&P’s believes is currently at the lower end of the indicated rating. The company’s ability to restore the capital adequacy of the organization to a level that is more commensurate with the indicated rating will determine the necessity of further rating actions.
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