Experts at A.M. Best have been looking at the financial strength of Navigators Group Inc (NASDAQ:NAVG) for some time and they are out with a verdict: the insurer’s financial strength is excellent – A. But A.M. Best’s review of Navigators’ financial strength also captured the company’s subsidiary, which the firm also has a favorable view of.
As such, A.M. Best has assigned insurer credit rating (ICR) of “a+” on Navigators Insurance Company and Navigators Specialty Insurance Company, a wholly-owned subsidiary.
Ratings for the parent company
Navigators Group Inc is the publicly traded parent company of both Navigators Insurance Company and Navigators Specialty Insurance Company. Regarding the parent, A.M. Best restated its ICR of “bbb+”. Additionally, the firms affirmed its issue ratings of “bbb+” on the $265 million notes issued by Navigators that are due 2023. Furthermore, A.M. Best issued shelf rating of “bbb+”, “bbb” and “bbb-“ on unsecured notes, subordinate notes and preferred securities issued by NAVG, respectively.
Overall, the ratings that A.M. Best has assigned Navigators Group Inc and its operating subsidiaries indicate a stable outlook.
According to A.M. Best, the ratings reflect the position of Navigators as a leader in the global insurance stage, especially in the marine sector. Those ratings also speak of the company’s diversified business, the conservative approach exhibited by the management and modest exposure to windstorm.
Navigators Group’s historical profitability is another factor that has been captured in the bullish financial strength ratings by A.M. Best. Nevertheless, A.M. Best takes note of the pressure Navigators has faced in its underwriting business.
Warning on catastrophe losses
The A.M. Best ratings for Navigators Group Inc come at a time when the company has warned that it could book an after-tax catastrophe loss of $12 million in 2Q2016. The estimated catastrophe loss relates to the company’s reinsurance business.
Navigators said in a press release that the notable catastrophe events that will impact its 2Q results include the Ecuador earthquake and the wildfires in Alberta. The company sees heightened global natural catastrophes.
It is estimated that insurers will possibly book between $15 and $20 billion in catastrophe losses due to at least 25 adverse weather events that took place in 2Q.