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A.M. Best Downgrades Ratings of Nevada General Insurance CompanyA.M. Best has downgraded the financial strength rating (FSR) to B++ (Good) from A- (Excellent) and the issuer credit rating (ICR) to "bbb+" from "a-" of Nevada General Insurance Company (Nevada General) (Las Vegas, NV). The outlook for the FSR has been revised to stable from negative, while the outlook for the ICR remains negative. Nevada General is a nonstandard personal automobile writer in Nevada, New Mexico, Arizona and California that, together with Enumclaw Property & Casualty Insurance Company (Enumclaw, WA), are wholly-owned subsidiaries of Mutual of Enumclaw Insurance Company (MOE) (Enumclaw, WA). Concurrently, A.M. Best has affirmed the FSR of A- (Excellent) and the ICR of "a-" of Mutual of Enumclaw Insurance Company and its fully reinsured subsidiary, Enumclaw Property & Casualty Insurance Company, along with the stable outlooks. The rating downgrades reflect Nevada General's geographic concentration, limited product offering, elevated expense ratio and recent trend of operating losses. The ratings recognize that underwriting performance has been highly influenced by competitive market conditions, which highly influence the company's favored new business risk characteristics and pricing. Nevada General maintains strong capitalization and a historic track record in its chosen niche market and this is recognized in the rating. However, the overall view of Nevada General's market rofile remains challenged. The ratings reflect the fact that management anticipates its operating performance will improve prospectively due to the corrective actions taken, sound operating strategies, its extensive local market knowledge of the nonstandard automobile market, along with recent improvements in systems and reporting structures. Factors that may lead to negative rating actions include a material loss in its capitalization, unanticipated significant deterioration in operating results or substantial adverse reserve development. The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology. Key insurance criteria reports utilized:
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 © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
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