A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of National Guaranty Insurance Company of Vermont (NGIC). The outlook for both ratings is stable.
The ratings of NGIC reflect its excellent risk-adjusted capitalisation, operating performance and liquidity positions, as well as its sophisticated risk management strategy and practices, conservative investment strategy, its management team’s extended experience in the industry and its parent’s, Waste Management (WM), operational controls.
Partially offsetting these positive rating factors is that a large percentage of NGIC’s surplus is loaned back to WM, which is supported by a 24-hour demand note.
NGIC’s capital levels are monitored by the state and it must maintain a certain aggregate exposure to capital ratio as prescribed by the Vermont Department of Financial Regulation.
As a pure captive established to meet the financial assurance obligations of WM, NGIC’s financial strength is closely tied to the financial position of WM.
A.M. Best views the management and corporate strategy as strengthening to the ratings, given NGIC’s conservative underwriting, operational goals and transparency.
NGIC’s enterprise risk management practices have been deemed as being strong, given the impact on the conservative risk culture, defined risk controls and its capital and surplus.
A.M. Best has stated that it expects NGIC’s future operating performance to be stable, and a strong and stable earnings profile should provide further support to control its growth and business writings, which are consistent with its capital and surplus position.
NGIC’s ratings are not expected to be upgraded within the next 12-24 months as its operating performance and capital position already have been considered in the ratings process.
