A.M. Best Co. has affirmed the financial strength rating (FSR) of ‘A+’ (Superior) and issuer credit ratings (ICR) of “aa-” of Nationwide Group and its four P/C pooled members and 22 reinsured affiliates.
Best also affirmed the debt ratings of “a” of the $1.1 billion in existing surplus notes of Nationwide Mutual Insurance Company and the $400 million in pass-through securities of North Front Pass-Through Trust. The outlook for all the above ratings is stable.
“Nationwide’s ratings reflect its strong capitalization, favorable core operating results attributable to its continually evolving risk management process, which includes strict underwriting discipline, increased rates and numerous operating efficiencies implemented by management,” said Best. “In addition, Nationwide benefits from a diversified product offering that includes standard and specialty personal, commercial and surplus lines of business. The ratings further recognize Nationwide’s market presence, multiple distribution channels and decentralized operational structure that provides superior service to agents and policyholders.”
Best said its ratings bulletin also coincides with the “recent announcement of the offer by Nationwide Mutual and certain other affiliates to acquire the publicly traded common shares of the downstream holding company, Nationwide Financial Services, Inc., the parent of Nationwide’ s life subsidiaries.” (See following article).
Best added: “Risk-adjusted capitalization is expected to decline as a result of the privatization transaction, yet remain well supportive of Nationwide’s current ratings. If accepted by NFS, closure of the transaction is subject to various regulatory and shareholder approvals.”
Best also has affirmed the FSR of ‘B+’ (Good) and the ICR of “bbb-” of Nationwide Indemnity Company (NIC), the Nationwide Group’s run-off entity, primarily for asbestos and environmental (A&E) claims. The outlook for these ratings is stable.
In addition Best affirmed the FSR of ‘B-‘ (Fair) and the ICR of “bb-” of Nationwide Insurance Company of Florida (NICOF). NICOF is dedicated to writing the group’ s Florida homeowners’ business. Best revised the ratings outlook to stable from negative, “reflecting the favorable impact of NICOF’s aggressive coastal non-renewal initiative on its catastrophic exposure and risk-adjusted capitalization.” Best added that as “wholly owned subsidiaries of Nationwide Mutual, NIC’s and NICOF’s ratings benefit from the implicit and explicit financial support of their parent.”
For a complete listing of Nationwide Group’s FSRs, ICRs and debt ratings, go to: www.ambest.com/press/031102nationwide.pdf.
Source: A.M. Best – www.ambest.com
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