OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a+” of Nodak Insurance Company (Nodak Insurance) (Fargo, ND), and its reinsured affiliate, Battle Creek Mutual Insurance Company (Battle Creek, NE). Collectively, these companies are referred to as Nodak Insurance Group (Nodak). Concurrently, AM Best has affirmed the Long-Term ICR of “bbb+” for NI Holdings, Inc. (Fargo, ND) [NASDAQ: NODK], a publicly traded holding company that owns 100% of Nodak Insurance. Also, AM Best has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” of American West Insurance Company (American West) (Fargo, ND), a wholly owned and separately rated subsidiary of Nodak Insurance. The outlook of these Credit Ratings (ratings) remain stable.
The ratings reflect Nodak’s balance sheet strength, which AM Best categorizes as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM). Nodak’s balance sheet is assessed as strongest, supported by the strongest level of risk-adjusted capitalization as measured by Best’s Capital Adequacy Ratio (BCAR), net and gross underwriting leverages that compare favorably with the composite averages, a conservative investment portfolio and access to the capital markets as part of a publicly traded organization (NI Holdings, Inc.). Operating performance remains strong as Nodak’s strict underwriting standards have continued to result in favorable combined and operating ratios. Consistent positive pre-tax operating gains and net income, primarily driven by underwriting gains, have resulted in surplus growth in each of the past five years. Nodak’s neutral business profile is driven by the group’s position as a market leader in personal lines, farm and crop insurance in North Dakota. Additionally, the group has continued to diversify geographically. Nodak’s ERM is appropriate for its risk profile as a publicly traded auto, property and crop insurer. Nodak maintains a developed risk framework and management has a strong understanding of the level of risk the organization is willing to accept.
The ratings of American West reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its strong operating performance, limited business profile and appropriate ERM. American West’s balance sheet is assessed as very strong, supported by the strongest level of risk-adjusted capitalization as measured by BCAR, low, albeit increasing, net and gross underwriting leverage, and a conservative investment portfolio comprised of high quality fixed income and cash. American West’s strong operating performance is supported by its five-year average combined and operating ratios that compare favorably with the private passenger standard automobile and homeowners composite averages. Even as American West has experienced substantial premium growth, it has maintained loss & loss adjustment expense (LAE) and expense ratios that compare favorably with the composite averages. American West’s limited business profile is driven largely by its geographic concentration in South Dakota, Minnesota and North Dakota, and its limited market position within those states. American West’s ERM is assessed as appropriate, and as a member of the Nodak Insurance Group, American West benefits from Nodak’s risk management practices and is included in Nodak’s reinsurance program.
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