A.M. Best has affirmed the financial strength rating of A (Excellent) and the long-term issuer credit rating of “a” of NiSource Insurance Corporation (NICI).
The ratings reflect NICI’s balance sheet strength, which A.M. Best categorises as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
A.M. Best explained that although risk-adjusted capitalisation is lower than in previous years, NICI's balance sheet strength is still supportive of the very strong assessment.
NICI is the single-parent captive insurer, wholly owned by NiSource 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.
A.M. Best suggested that NICI will remain well-capitalised and is positioned to sustain a strong level of operating profits due to its demonstrated risk management expertise and conservative underwriting criteria.
Positive rating action could occur if NICI sustains positive operating results and improves risk-adjusted capitalisation.
However, the rating company said that 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 capitalisation.
