A.M. Best Affirms Nationwide's Financial Strength Ratings and Assigns Initial Debt Ratings.Business & Insurance Editors OLDWICK, N.J.--(BUSINESS WIRE)--June 22, 2001 A.M. Best Co. has affirmed the A+ (Superior) financial strength ratings of the primary property/casualty operations of the Nationwide Group, Columbus, Ohio Columbus is the capital and the largest city of the American state of Ohio. Named for explorer Christopher Columbus, the city was founded in 1812 at the confluence of the Scioto and Olentangy rivers, and assumed the functions of state capital in 1816. , as well as its affiliated life insurance companies. In addition, A.M. Best has assigned the following debt ratings: "a" senior debt rating to Nationwide Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. Inc. (NYSE NYSE See: New York Stock Exchange : NFS (Network File System) The file sharing protocol in a Unix network. This de facto Unix standard, which is widely known as a "distributed file system," was developed by Sun. See file sharing protocol and WebNFS. NFS - Network File System ); "a" surplus note rating to Nationwide Mutual Insurance Company Nationwide Mutual Insurance Company & Affiliated Companies is a group of large U.S. insurance and financial services companies based in Columbus, Ohio. History Beginnings as Farm Bureau Mutual ; and "a-" ratings on the trust preferred securities issued by Nationwide Financial Services Capital Trust and Capital Trust II and AMB-1 commercial paper rating to Nationwide Life Insurance Company. The property/casualty financial strength rating applies to the four pool members led by Nationwide Mutual Insurance Company, 15 reinsured affiliates and is based on the consolidation with two separately rated property/casualty subsidiaries. The life insurance financial strength rating applies to Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company. Despite the affirmation, a negative outlook has been placed on the property/casualty group's rating. The property/casualty financial strength rating is supported by Nationwide's strong capitalization, the value of the Nationwide franchise and market leadership within the property/casualty industry. These rating factors are derived from its overall market knowledge, customer loyalty and efficient cost structure. Finally the rating takes into account the diversified earnings stream provided through affiliated companies Affiliated Companies A situation that occurs when one company owns a minority interest (less than 50%) in another company. Also refers to companies that are related to each other in some way. Notes: An affiliated company is sometimes referred to as a subsidiary. that include NFS, comprising the life subsidiaries and Gartmore Investment Management, plc (asset management). The negative outlook on the property/casualty financial strength rating relates to A.M. Best's concern regarding Nationwide's operating performance relative to its "Superior" rated peers, due to increased loss cost trends, intensely competitive personal automobile market conditions and susceptibility susceptibility the state of being susceptible. Refers usually to infectious disease but may be to physical factors such as wetting or to psychological factors such as harassment. to significant weather-related events, as well as the implementation risk associated with strategic initiatives. Nonetheless, Nationwide Group's capitalization remains supportive of its current ratings. A.M. Best believes the payment of interest from policyholder's surplus on the surplus notes as stipulated in the documentation at Nationwide Mutual Insurance Company will continue to be replenished from earnings. Financial leverage at Nationwide Financial Services is conservative at under 15%--as measured by debt to adjusted capital--with 100% equity credit given to its preferred securities and fixed coverage ratio in the low double digit Noun 1. double digit - a two-digit integer; from 10 to 99 integer, whole number - any of the natural numbers (positive or negative) or zero; "an integer is a number that is not a fraction" area. Nationwide's life operations remain a core business for the group, and have historically provided a significant and stable source of earnings, mitigating the more volatile performance of the property/casualty operations and providing diversification to the organization. The partial public ownership of Nationwide also enhances the group's financial flexibility, allowing easier access to the capital markets for a variety of purposes. The financial strength rating on the life subsidiaries recognizes the leading positions in the qualified and non-qualified retirement savings market, the diverse array of products and extensive and effective distribution channels. Supported by its strong earnings base, NFS has exhibited solid GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). capitalization. Further, the explicit support of its mutual parent, as demonstrated in the Gartmore acquisition, puts NFS in a favorable position Noun 1. favorable position - the quality of being at a competitive advantage favourable position, superiority advantage, vantage - the quality of having a superior or more favorable position; "the experience gave him the advantage over me" relative to its peers. Nationwide has built a dominant position in the personal lines property/casualty market and a growing presence in the life/retirement savings fields and ranks as the fourth largest domestic property/casualty insurance company and among the top three annuity writers in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . To access the financial strength ratings and the existing and indicative debt ratings lists view http://www.ambest.com/press/nationwide.pdf. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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