A.M. Best: Outlooks Negative for National Lloyds, American Summit Insurance

June 8, 2018

A.M. Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a” of National Lloyds Insurance Co.

Concurrently, A.M. Best has revised the outlooks to negative from stable and affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” of American Summit Insurance Co., a National Lloyds’ affiliate.

National Lloyds and American Summit write homeowners, fire and flood insurance for dwellings and manufactured homes. They are domiciled in Dallas and are subsidiaries Hilltop Holdings Inc. (HTH), a financial holding company also based in Texas.

The ratings reflect National Lloyds and American Summit’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The revised outlooks reflect National Lloyds and American Summit’s lower level of risk-adjusted capitalization due to anticipated significant dividend payments to its parent company in the coming months. Risk-adjusted capitalization has declined following the implementation of an aggressive capital management strategy.

A.M. Best acknowledges the capital support National Lloyds received from HTH in the past and expects it to continue if needed.

National Lloyds has reported volatile underwriting results during the previous five-year period, which were driven by a variety of frequent and severe weather-related events, above-average expense structure and geographic concentration risk.

American Summit has reported generally profitable operating performance, generated by steady, but declining, investment income, other income and capital gains over the previous five-year period. Additionally, the ratings acknowledge the company’s stable loss reserving trends.

Source: A.M. Best

Topics Trends AM Best

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Latest Comments

  • February 28, 2019 at 6:08 pm
    happycamper says:
    I would "strongly" advise all agents who wrote for National Lloyds in the past 5 years: If you participated in their yearly contingent commissions program, you'll definitely w... read more
  • June 12, 2018 at 11:39 am
    lonestar says:
    For a while this past year, I was getting emails / phone calls from them, asking me to start using them again. I told them I would never use them again, unless they went back... read more
  • June 11, 2018 at 10:52 am
    Eddie G Hall says:
    They stopped underwriting and started nitpicking. The business I moved from them because they nitpicked, has been on the books for over 5 years with no claims. I wouldn't wr... read more

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