OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has placed under review with positive implications the Financial Strength Rating (FSR) of B+ (Good) and the Long-Term Issue Credit Ratings (Long-Term ICR) of “bbb-” of Nationwide Indemnity Company.
AM Best has affirmed the FSR of A+ (Superior) and the Long-Term ICR of “aa-” of the members of Nationwide Group (Nationwide). Concurrently, AM Best has affirmed the FSR of A+ (Superior) and Long-Term ICR of “aa-” of Nationwide Life Insurance Company and its subsidiaries, Nationwide Life and Annuity Insurance Company and Jefferson National Life Insurance Company. These companies are the key life/annuity subsidiaries of Nationwide Financial Services Inc. (NFS), and are collectively known as Nationwide Life Group. Additionally, AM Best has affirmed the Long-Term ICR of “a-” of NFS and all of its existing Long- and Short-Term Issue Credit Ratings (Long-Term IR; Short-Term IR). AM Best also has affirmed the FSR of A- (Excellent) and the Long-Term ICR of “a-” of Harleysville Life Insurance Company (HLIC). The outlook of these Credit Ratings (ratings) is stable.
In addition, AM Best has affirmed the Long-Term IRs of “a” of the surplus notes issued by Nationwide Mutual Insurance Company (Nationwide Mutual). Lastly, AM Best has affirmed the FSR of B++ (Good) and the Long-Term ICR of “bbb” of Titan Insurance Company (Titan). The outlook of these ratings is stable. All companies are headquartered in Columbus, OH, unless otherwise specified. (See link below for a detailed listing of all the companies and ratings.)
These rating actions and positive implications for Nationwide Indemnity reflect AM Best’s expectation that the Nationwide organization will improve risk-adjusted capital support for Indemnity through implementation of a pooling agreement. AM Best will monitor this closely and expects to resolve the under review status early in 2021.
The ratings of Nationwide reflect its balance sheet strength, which AM Best categorizes as strongest, as well as its marginal operating performance, favorable business profile and appropriate enterprise risk management (ERM). These ratings also consider the breadth of resources of the organization as reflected in the consolidated results of the enterprise.
Risk-adjusted capital aligned to the property and casualty exposures remains more than supportive of the risk profile. This included buffer positions against significant weather-related events and natural catastrophe-related losses. The ratings capture a view of the unfavorable underwriting results as compared with their peers in the core property/casualty lines of business. While Nationwide has implemented a wide range of strategic and operational initiatives to address the underwriting performance, the benefit of these plans have yet to gain considerable traction. AM Best notes that recently the group made progress in areas such as non-weather losses in the standard auto line and their expense structure. Additionally, strong investment results have alleviated the impact of underwriting performance over the last several years.
The ratings of Nationwide Life Group reflect its balance sheet strength, which AM Best categorizes as strongest, as well as its strong operating performance, favorable business profile and appropriate ERM. The group’s balance sheet assessment is anchored by its risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), as well as the organization’s overall financial strength and flexibility. AM Best notes that the group’s quality of surplus is somewhat lower given the usage of affiliated surplus notes as well as captive insurers, which provide support of certain redundant reserving needs within the capital structure. Nationwide Life Group’s operating performance continues to reflect its diverse product portfolio, producing consistent sales growth and favorable operating metrics. The organization continues to benefit from its market position among the leading providers of retirement plans, as well as top 10 carrier in its core life and annuity markets.
The ratings of HLIC reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its marginal operating performance, limited business profile and appropriate ERM. The ratings also reflect the operational and financial support of the Nationwide organization. HLIC stopped writing new business in 2014 and its legacy business continues to run off as expected.
NIC retains its role as a repository for asbestos and environmental reserves within the organization. Consequently, future operating performance is restrained and there is no expectation of modification to its established role.
The ratings of Titan reflect its balance sheet strength, which AM Best categorizes as adequate, as well as its marginal operating performance, limited business profile and appropriate ERM. The ratings reflect the support provided by the Nationwide organization across all aspects of Titan’s short-term and long-term operations on a day-to-day basis.
Titan serves a focused target market with distinct dynamics for the benefit of the Nationwide enterprise.
A complete listing of Nationwide Group’s FSRs, Long-Term ICRs and Long- and Short-Term IRs also is available.
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