OLDWICK, N.J.–(BUSINESS WIRE)–AM Best affirmed the Financial Strength Rating (FSR) of A
(Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of
“a” of National Lloyds Insurance Company (National Lloyds).
Concurrently, AM Best has affirmed the FSR of A (Excellent) and the
Long-Term ICR of “a” of American Summit Insurance Company (American
Summit), National Lloyds’ affiliate. The outlook of these Credit Ratings
(ratings) is negative. National Lloyds and American Summit are domiciled
in Dallas, TX and are subsidiaries of Hilltop Holdings Inc. (HTH)
(NYSE:HTH), a financial holding company based in Texas.
The ratings reflect National Lloyds and American Summit’s balance sheet
strength, which AM Best categorizes as very strong, as well as its
adequate operating performance, neutral business profile and appropriate
enterprise risk management.
The negative outlooks reflect AM Best’s concern over the companies’
deteriorating risk-adjusted capitalization due to significant dividend
payments to its parent company in recent years. Risk-adjusted
capitalization has declined due to an aggressive capital management
strategy implemented by HTH. AM Best expects the parent company to
support the operating companies if needed.
National Lloyds has experienced frequent and severe weather-related
events in recent years that have driven the volatility in underwriting
results, a reflection of geographic concentration of its book of
business. In addition, the company continues to report above-average
expenses related to investments in technology and a number of one-time
expenses from the relocation of its office to Dallas, TX.
American Summit reported an operating loss in 2018 due to severe weather
events; however, in past years the company reported generally positive
operating results generated by favorable underwriting profitability and
steady but significantly reduced investment income, other income and
capital gains.
This press release relates to Credit Ratings that have been published
on AM 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 AM 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 AM Best press releases, please view Guide
for Media – Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.
AM Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit www.ambest.com
for more information.
Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.
Contacts
Janet Hernandez
Senior Financial Analyst
+1
908 439 2200, ext. 5767
[email protected]
Joseph Burtone
Director
+1 908 439 2200, ext.
5125
[email protected]
Christopher Sharkey
Manager, Public Relations
+1
908 439 2200, ext. 5159
[email protected]
Jim Peavy
Director, Public Relations
+1 908
439 2200, ext. 5644
[email protected]
