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FOR IMMEDIATE RELEASE
OLDWICK - JULY 21, 2016 10:04 AM (EDT)
A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating (ICR) of “a+” of Navigators Insurance Company and its wholly owned and 100% reinsured subsidiary, Navigators Specialty Insurance Company, collectively referred to as Navigators. Concurrently, A.M. Best has affirmed the ICR of “bbb+” and the issue ratings of “bbb+”on $265 million 5.75% senior unsecured notes due 2023, as well as the shelf rating of “bbb+” on senior unsecured notes, “bbb” on subordinated notes and “bbb-” on preferred securities of Navigators’ publicly traded ultimate parent, The Navigators Group, Inc. (NAVG) [NASDAQ:NAVG]. The outlook for each rating remains stable. All companies are domiciled in New York, NY.
The ratings reflect Navigators’ leading position as a global provider of insurance to the marine sector, the group’s well-diversified book of business, its modest net windstorm exposure, management’s conservative approach to risk management, underwriting and claims handling. Further, the ratings consider the group’s solid level of risk-adjusted capitalization and historical profitability.
These positive rating factors are somewhat offset by the group’s moderate decline in underwriting results earlier in the past five-year period that were not in line with the group’s historical profit levels, its elevated (although declining) ceded reinsurance leverage and growth in relatively new lines of business.
In addition, Navigators benefits from the financial and explicit support from its parent company, NAVG. NAVG’s debt-to-total capital as of Dec. 31, 2015, is approximately 19.7% and along with its interest coverage ratios, fall within the guidelines for the current rating level.
The stable outlooks reflect A.M. Best’s expectation that the group will continue to maintain its solid level of risk-adjusted capitalization and operating performance, generating overall profitable results throughout market cycles.
While Navigators’ ratings are stable, positive rating actions could occur if there were a sustained favorable trend in operating results relative to industry peers and continuation of strong risk-adjusted capitalization. Negative rating actions could occur if there were a sustained deterioration in underwriting and operating results over a period of several years, an occurrence of a sudden large or catastrophic loss event that materially hinders risk-adjusted capitalization or if there was any material deviation from the company’s submitted financial projections.
This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.