The president and CEO of New York, N.Y.-based NYMAGIC, said the recent ratings affirmation for his company and its subsidiaries is “a confirmation of our financial strength.”
NYMAGIC is an insurance holding company that specializes in commercial lines property and casualty and ocean marine insurance.
A.M. Best affirmed the ratings of parent company NYMAGIC, as well as its New York Marine Group and its two members, New York Marine and General Insurance Co. and Gotham Insurance, all of New York, N.Y., and eligible to write business in all 50 states and the District of Columbia.
NYMAGIC had its issuer credit rating of “bbb” affirmed and the three subsidiaries had their financial strength ratings of A (Excellent) and issuer credit ratings of “a” affirmed.
A.M. Best also affirmed a financial strength rating of A- (Excellent) and issuer credit rating of “a-” for Phoenix, Ariz.-based Southwest Marine and General Insurance Co., another NYMAGIC subsidiary.
The outlook for all ratings is stable, according to A.M. Best.
The ratings service noted that its actions reflect NY Marine’s solid capitalization, derived from historically conservative underwriting leverage, strong history of operating earnings, management’s efforts to decrease its catastrophe exposure, proven ability to quickly adapt to changing market conditions and a strong market niche in its core marine business line.
George Kallop, NYMAGIC’s president and CEO, said the ratings service’s affirmations were “a confirmation of our financial strength.”
“NYMAGIC has successfully navigated the turbulence in the financial markets over the past year and is well positioned for future growth,” Kallop said in a statement. “We are committed to growing our premium revenues in a prudent manner to serve the needs of a larger number of policyholders while building value for our shareholders.”
Partially offsetting the positive ratings factors, according to A.M. Best, is NY Marine’s dependence on reinsurance, the decreased financial flexibility at NY MAGIC following its $32.5 million capital contribution to NY Marine in 2008 and the company’s limited capital growth over the years, according to A.M. Best.
The ratings service also noted that this limited growth has been hindered by dividend payments representing a significant portion of earnings for NY Marine and the group has a large portfolio of Alt-A mortgaged backed securities, which have lost significant market value due to the turmoil within the housing and credit markets.
“Nonetheless, NY Marine holds a super senior position within these securities, which have maintained their high credit ratings, significantly lowering the risk of default,” A.M. Best noted. “As such, the majority of the risk presented by these securities is their illiquidity, although NY Marine plans on holding these securities to maturity.”
Property-casualty insurer NYMAGIC, subsidiaries ratings reaffirmed via IFAwebnews .