A.M. Best Co. affirmed the financial strength rating (FSR) of “A” (Excellent) and upgraded the issuer credit rating (ICR) to “a+” from “a” of Waco, Texas-based National Lloyds Insurance Company. The outlook for these ratings is stable.
Best also revised the outlook to positive from stable, and affirmed the FSR of “A-” (Excellent) and the ICR of “a-” of National Lloyds affiliate American Summit Insurance Company.
Both companies are subsidiaries of NLASCO Inc., which is owned by Hilltop Holdings Inc. The insurance companies are domiciled in Waco and Hilltop Holdings is domiciled in Dallas.
Best cited National Lloyds’ solid underwriting, capitalization and local market expertise as factors in the rating action. The rating agency said the positive factors are “somewhat offset by National Lloyds’ geographic concentration of risk primarily in the Texas marketplace and elevated underwriting expense ratio.”
The American Summit revision reflects “the company’s favorable risk-adjusted capitalization, geographic spread of risk in moderately catastrophe prone areas and successful underwriting performance,” Best said. Like National Lloyd’s, American Summit has an elevated underwriting expense ratio. It also has low investment yields, according to Best.
Source: A.M. Best, www.ambest.com.
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