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AM Best Affirms Credit Ratings of NiSource Insurance Corporation, Inc.AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of "a" of NiSource Insurance Corporation, Inc. (NICI) (Salt Lake City, UT). The outlook of these Credit Ratings (ratings) remains stable. The ratings reflect NICI's balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management. Although risk-adjusted capitalization is lower than in previous years, NICI's balance sheet strength is still supportive of the very strong assessment. NICI is a single-parent captive insurer wholly owned by NiSource Inc. that accepts insurance risks from NiSource and its affiliates, providing all-risk property, workers' compensation, excess general and automobile liability, medical stop-loss, long term disability and group life insurance. Since inception, NICI has produced profitability measures that generally have been at levels equal to or better than its industry peers. Over the years, retained earnings has bolstered its balance sheet strength; however, risk-adjusted capital declined in 2019 due to the additional capital necessary to support a greater portion of its parent's excess general liability program. AM Best believes NICI will remain well-capitalized and is positioned to sustain a strong level of operating profits due to its demonstrated risk management expertise and conservative underwriting criteria; hence, the stable outlooks. AM Best has taken a favorable view of NICI's overall profile within the ultimate parent's structure and recognizes the benefits inured from this. Particular attention also is paid to its strategic role as a single-parent captive and the financial wherewithal of its ultimate parent. Positive rating action could occur if NICI sustains positive operating results and improves risk-adjusted capitalization. Converely, downward rating pressure could result from a decline in the company's liquidity levels, an increase in underwriting leverage or an outsized loss event that triggers a sudden decline in risk-adjusted capitalization. In addition, financial issues resulting in rating pressure on the ultimate parent could impact NICI's ratings. AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best's Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive. This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper media use of Best's Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and AM Best Rating Action Press Releases. AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com. Copyright © 2020 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED. View source version on businesswire.com: https://www.businesswire.com/news/home/20200124005345/en/ |
