A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and issuer credit ratings (ICR) of “a+” of the National Interstate Group (Richfield, OH) and its members. Concurrently, A.M. Best has affirmed the ICR of “bbb+” of the group’s publicly traded parent, National Interstate Corporation (National Interstate) (Richfield, OH) (NASDAQ: NATL). The outlook for all ratings is stable. (See below for a detailed list of the companies.) These rating actions reflect the group’s very strong operating results, excellent risk-adjusted capitalization, its leadership position in its core niche public transportation market and diverse product structure. The ratings also reflect the additional financial flexibility provided by National Interstate, which maintains modest financial leverage and very strong interest coverage ratios. These positive rating attributes are somewhat offset by the group’s business concentration in the public and truck transportation industries and the inherent risk in new business, particularly growth in the group’s alternative risk transfer (ART) programs, which now comprise approximately 56% of its gross written premiums, as well as the risks associated with the group’s recently announced planned acquisition of Vanliner Group, Inc. The outlook recognizes A.M. Best’s expectation that the group’s diverse product structure and specialty focus will continue to generate positive earnings while maintaining solid risk-adjusted capital over the near term, despite increasing competitive pressures, challenging macro economic conditions and the integration risks associated with the Vanliner Group, Inc. acquisition. The FSR of A (Excellent) and ICRs of “a+” have been affirmed for National Interstate Group and its following members:
National Interstate Insurance Company
National Interstate Insurance Company of Hawaii, Inc.
Triumphe Casualty Company
For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.