OLDWICK, N.J.–(BUSINESS WIRE)–A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a” of the members of Nonprofits Insurance Alliance Group (NIAG): Alliance of Nonprofits for Insurance, Risk Retention Group (ANI) and National Alliance of Nonprofits for Insurance (NANI) (both domiciled in Barre, VT), as well as Nonprofits Insurance Alliance of California, Inc. (NIAC) (Santa Cruz, CA). The outlook of these Credit Ratings (ratings) is stable.
The rating affirmations recognize the group’s excellent risk-adjusted capitalization and operating performance, its strong management, and effective niche market strategy. The ratings also consider the benefits derived and the companies’ strategic roles within the group, including the national platform provided by ANI, which is controlled, not owned, by NIAG. A.M. Best considers that ANI, NANI and NIAC function as a group, with the common mission of serving nonprofit organizations through common management of human resources and information technology, while administration, underwriting, marketing, claims and risk management services are provided by Alliance Member Services. Despite the lack of common ownership, A.M. Best expects that the respective boards of directors would act to support all entities within the group. Accordingly, A.M. Best deviated from its “Rating Members of Insurance Groups” rating methodology criteria procedure in regard to the lack of common ownership among the group members.
Partially offsetting these positive rating factors are the companies’ challenges associated with managing a growing book of business, geographical expansion and establishing market positions in the face of competition.
NIAC, ANI and NANI are part of NIAG. NIAC and ANI provide a range of liability coverages to 501(c)(3) nonprofit organizations, NIAC in California and ANI in all states. From Aug. 1, 2016, NIAC also provides property coverages. NANI provides property coverages for nonprofit organizations insured by ANI and also for NIAC prior to Aug. 1, 2016, through a fronting arrangement. Despite significant business growth in the past five years, the group has been able to maintain conservative leverage measures. The group’s capitalization levels are protected by solid reinsurance protection from a leading global reinsurance group. They also are supported by conservative reserving and investment approaches. In addition, NIAC, ANI and NANI benefit from their nonprofit, tax-exempt status and from the experience and success of NIAC, which has a leading market position serving California nonprofits. Reflecting the group’s expertise, strong customer focus and commitment to the nonprofit sector, member retentions are very high.
A.M. Best expects the group’s future operating performance to be stable but strong, and the stable earnings profile should further support the group to control its growth and business writings consistent with its capital and surplus position.
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.
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