AM Best has affirmed ratings for NiSource Insurance Corporation, Inc (NICI) (Salt Lake City, UT) with a financial strength rating of A (Excellent) and a long-term issuer credit rating of “a” (Excellent).
The outlook for these credit ratings is stable.
These ratings reflect NICI’s balance sheet strength, which AM Best assesses as ‘very strong’ — the strongest level of risk-adjusted capitalisation — as measured by Best’s Capital Adequacy Ratio (BCAR).
The balance sheet strength represents the company’s strong liquidity measures, conservative investment philosophy and history of favourable reserve development, according to AM Best.
In addition, the affirmed ratings awarded by AM Best reflect the NICI’s strong operating performance, neutral business profile and appropriate enterprise risk management.
AM Best reports that the combined and operating ratios have outperformed the industry averages, due to a low underwriting expense structure and loss ratios trending favourably.
Over the years, retained earnings have bolstered NICI’s balance sheet strength with future earnings expected to produce more of the same, complements of its niche captive orientation, risk management expertise and conservative underwriting criteria; consequently, the stable outlooks.
NICI is a single-parent captive insurer wholly owned by NiSource Inc., providing all-risk property, workers’ compensation, excess general and automobile liability, medical stop-loss, long-term disability and group life insurance for the parent and its affiliates.
AM Best has taken a balanced view of NICI’s overall business profile, which albeit limited in scope, maintains inherent advantages as a single-parent captive with immediate access to business and resources along with the broader financial wherewithal of its ultimate parent.
