A.M. Best has upgraded the financial strength rating to “B+ (Good)” from “B (Fair)” and the issuer credit rating to “bbb-” from “bb+” of Nationwide Insurance Company of Florida (NICOF).
The outlook for both ratings has been revised to stable from positive.
The ratings and outlook for NICOF reflect its solid risk-adjusted capitalsation and improved and profitable operating performance has been reduced in recent years. Exposures and concentrations of risk in Florida have also been reduced.
It also benefits from implicit and explicit support from its parent, Nationwide Mutual Insurance Company, through platforms and processes such as catastrophe reinsurance coverage, enterprise risk management and common infrastructure and distribution
channels.
Partially offsetting these positive rating factors is the company’s limited business profile as a single-state, single-product writer, leaving NICOF subject to potential adverse regulatory and judicial decisions, as well as economic conditions.
In addition, as a Florida writer, the company will always be at risk of catastrophic weather events.
If NICOF produces a long-term profitable trend in underwriting performance and continued strong risk-adjusted capitalisation it could lead to an upgrade of the ratings.
Additionally, any change in the level of support or integration with Nationwide could lead to consideration of rating movement.
