A.M. Best Downgrades Ratings of National Unity Insurance Company

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has downgraded the financial strength rating to B+ (Good) from B++ (Good) and the issuer credit rating to “bbb-” from “bbb” for National Unity Insurance Company (National Unity) (San Antonio, TX). The outlook for both ratings is negative.

The downgrade of the rating follows the reporting of third quarter results which included a decline in surplus, sizeable net underwriting losses and adverse reserve development. These results are primarily due to the company’s domestic non-standard auto book of business. National Unity’s results started to deteriorate in 2014 and have significantly worsened through Sept. 30, 2015. Management has terminated several of the managing general agents that were producing the business and premium volume and policies in-force have rapidly declined through the year. However, inadequate pricing, poor claims handling and inadequate reserving have resulted in adverse operating results, sizeable underwriting losses and an elevated combined ratio.

The negative outlook reflects A.M. Best’s opinion that adverse operating results will continue and have a further drain on overall risk-adjusted capitalization.

National Unity maintains fair capitalization for its current rating and historically favorable operating performance. This was accomplished through management’s expertise in its niche product of cross border, low limit and short duration policies. This product continues to produce excellent results. Overall, the company’s five-year results are favorable and outperform the private non-standard auto industry composite in several key financial measures. Deterioration in operating results and overall risk-adjusted capitalization began with the rapid premium expansion in domestic non-standard auto policies and entrance into states where they had no operational experience. As a result, underwriting leverage measures sharply increased, surplus deteriorated and overall risk-adjusted capitalization declined.

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 visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

View source version on businesswire.com: http://www.businesswire.com/news/home/20151216006036/en/

A.M. Best
Joseph Burtone, 908-439-2200, ext. 5125
Assistant Vice President
[email protected]
or
Richard Attanasio, 908-439-2200, ext. 5432
Vice President
[email protected]
or
Christopher Sharkey, 908-439-2200, ext. 5159
Manager, Public Relations
[email protected]
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
[email protected]

Source: A.M. Best

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Akeso IO2.0 + ADC2.0 Strategy Makes Another Advancement: First Patient Dosed in Phase Ib/II Study of HER3 ADC (AK138D1) Combined with Ivonescimab in Lung Cancer
• Sauropods in Katsuyama: Standing Beneath the Giants That Shook the Earth at Fukui Prefectural Dinosaur Museum
• INFiLED Launches GeminiLED Series: a Dual-Sided LED Display for Public Spaces