Press Release - MARCH 13, 2018
A.M. Best Removes From Under Review With Negative Implications and Downgrades Credit Ratings for Members of NYCM Insurance Group
FOR IMMEDIATE RELEASE
OLDWICK - MARCH 13, 2018
The ratings were placed under review with negative implications on Oct. 13, 2017, following the release of the updated Best’s Credit Rating Methodology (BCRM). The current rating actions follow the completion of A.M. Best’s analysis of NYCM Insurance Group under the updated BCRM.
The ratings reflect NYCM Insurance Group’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
NYCM Insurance Group’s balance sheet strength is supported by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), reflective of moderate underwriting leverage and its prudent investment risk profile and enhanced by consistent surplus growth. Additionally, strong liquidity measures enhanced with generally positive operating cash flows augment the balance sheet strength, which is offset somewhat with nominal adverse loss reserve development in six out of the past nine accident years, primarily driven by private passenger auto liability, largely an industry-wide issue. NYCM Insurance Group’s operating performance on a five- and ten-year average basis is adequate, with key operating metrics that are similar with its peer averages, and the group’s combined ratio averages slightly below break-even. Net income was generated in nine out of the past ten years, largely due to solid net investment income and other income, either complementing or offsetting variable net underwriting results.
NYCM Insurance Group’s business profile is neutral. Although there is geographical concentration in New York, which exposes results to weather-related events and to regulatory challenges, the group maintains a prominent market position supported with a strong and tenured management team with a long-standing track record. The group also benefits from appropriate ERM, including a developed risk management framework and comprehensive reinsurance program.
This press release relates to Credit Ratings 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. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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