AM Best has affirmed the Long-Term Issuer Credit Rating (Long-Term ICR) of 'a-' and the Long- and Short-Term Issue Credit Ratings (Long-Term IR; Short-Term IR) of
AM Best also has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term ICRs of 'aa-' of
Furthermore, AM Best has affirmed the FSR of A+ (Superior) and the Long-Term ICRs of 'aa-' of
In addition, AM Best has revised the outlook to negative from stable for the Long-Term ICR and affirmed the FSR of A (Excellent) and the Long-Term ICR of 'a+' of
The ratings of the
The balance sheet strength assessment is derived from risk-adjusted capitalization at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR), which benefits from adverse development covers (ADC) for legacy asbestos and environmental reserves and Navigators' business, along with a comprehensive reinsurance program with highly rated reinsurers. The group's balance sheet strength also benefits from the financial flexibility afforded by The
The group's operating results reflect its adequate underwriting performance that is comparable to similarly assessed peers and composite norms. The organization has demonstrated an ability to organically grow stockholders' equity by producing favorable levels of pre-tax operating income. Investment income has been consistent, as growth in the long-term bond portfolio was offset mostly by declining investment yields. The company's multiple distribution capabilities support its strategy to build competitive advantage in the market. In
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addition, the acquisition of
The favorable business profile reflects the group's excellent market position within the property/casualty industry and its core group benefits market, geographic and product line diversity, experienced management team, generally conservative operating fundamentals and diversified underwriting initiatives, which provide balanced growth opportunities. The group's use of technology platforms throughout the organization, localized support and excellent service further strengthen its business profile.
ERM is viewed appropriate for the pool's size and complexity of its underwriting, investment and other risks based on its ERM framework and controls.
The ratings of Navigators reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, favorable business profile and appropriate ERM. The ratings also reflect the implicit and explicit support provided to Navigators by The
The balance sheet strength assessment of Navigators is derived from risk-adjusted capitalization at the very strong level. AM Best views the balance sheet's quantitative and qualitative components as neutral; however, Navigators is now a part of a larger segment within The
Navigators' five- and 10-year average underwriting performance metrics remain in line with the composite averages. Net investment income is solid and has grown steadily over the past five years, supported by a high quality investment portfolio. Recent reserve strengthening and higher loss and loss adjustment expenses have adversely impacted results for 2019.
The favorable business profile reflects Navigators' leading position as a global provider of insurance to the marine sector, the multichannel distribution platform that utilizes global, national and regional brokers, as well as wholesalers. Navigators' platform has been fully integrated into The
Navigators' ERM is now incorporated into The
The ratings of NIIC reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management.
The ratings also reflect, in the form of lift, the support provided to NIIC by its ultimate parent The
The revision of the Long-Term ICR outlook to negative reflects uncertainty as to the future business plans of NIIC, and the impact that this has on its business profile and its strategic importance to The
The
A complete listing of
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