Published: July 16, 2010
A.M. Best Upgrades Ratings of National American Insurance Company and Chandler (USA) Inc.
OLDWICK, N.J. - (BUSINESS WIRE) - A.M. Best Co. has upgraded the financial strength rating to B++
(Good) from B+ (Good) and issuer credit rating to "bbb" from "bbb-" of National
American Insurance Company (NAICO). Concurrently, A.M. Best has
upgraded the ICR to "bb" from "bb-" and debt rating to "bb" from "bb-" on
$24 million 8.75% senior unsecured debentures due 2014 (of which $7
million remains) of NAICO's parent, Chandler (USA) Inc. (Chandler)
(both domiciled in Chandler, OK). The outlook for all ratings is stable.
The ratings reflect NAICO's strong risk-adjusted capitalization,
improved operating performance and long-standing regional market
presence. The improvement is due in part to management's corrective
actions over the years, including significantly increasing rates,
reducing exposures, improving risk selection and tightening policy terms
and conditions.
These rating factors are somewhat offset by the historical adverse loss
reserve development reported on certain accident years prior to 2002, as
well as NAICO's considerable dependence on reinsurance, despite
increased retention levels in recent years. Nevertheless, the outlook is
supported by the company's significantly improved risk-adjusted capital
position, diminished loss reserve development reported in recent years
and management's projections for persistent operating profitability and
strong risk-adjusted capitalization over the near term.
The ratings also consider the financial leverage and interest coverage
of the organization on an enterprise basis. Consolidated financial
leverage of debt plus preferred stock to total capital remains
acceptable given the current rating levels, with interest coverage
ratios also within acceptable parameters.
NAICO offers various property/casualty insurance products through its
two main marketing programs: political subdivisions, which insures
school districts in Oklahoma, and standard lines.
For Best's Credit Ratings, an overview of the rating process and rating
methodologies, please visit www.ambest.com/ratings.
The principal methodologies used in determining these ratings, including
any additional methodologies and factors that may have been considered,
can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is a global full-service credit
rating organization dedicated to serving the financial and health care
service industries, including insurance companies, banks, hospitals and
health care system providers. For more information, visit www.ambest.com.
A.M. Best Co.
Analysts:
Scott Dodd,
908-439-2200, ext. 5582
scott.dodd@ambest.com
or
Gerard
Altonji, 908-439-2200, ext. 5626
gerard.altonji@ambest.com
or
Public
Relations:
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com
or
Jim
Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
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