A.M. Best Assigns Issuer Credit Rating to North Pointe Holdings and Upgrades Financial Strength Rating of North Pointe Insurance.OLDWICK, N.J. -- A.M. Best Co. has assigned an issuer credit rating (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of "bb" to North Pointe Holdings Corp (NPHC NPHC National Pan Hellenic Council NPHC North Phoenix Heart Center ) (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : NPTE NPTE National Parliamentary Tournament of Excellence NPTE National Physical Therapy Examination (Federation of State Boards of Physical Therapy) ) and has upgraded the financial strength rating (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) to B++ (Very Good) from B+ (Very Good) of its subsidiary, North Pointe Insurance Company (NPIC NPIC National Pesticide Information Center (formerly NPTN) NPIC National Passport Information Center NPIC National Photographic Interpretation Center NPIC National Photographic Intelligence Center ) (both of Southfield, MI). NPIC has also been assigned an ICR of "bbb". Concurrently, A.M. Best has affirmed the B+ (Very Good) FSR of NPIC's sister company, North Pointe Casualty Insurance Company (NPCIC) (Jacksonville, FL), and assigned it an ICR of "bbb-". All ratings have stable outlooks. These rating actions take into consideration the completed initial public offering (IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. ) of NPHC in September of 2005 and its beneficial impact on overall financial flexibility, holding company leverage, liquidity and improved statutory risk-adjusted capitalization of both NPIC and NPCIC. Net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from the IPO were approximately $42.4 million, about $10.0 million of which has been contributed to NPIC, with another $5.0 million infused into NPCIC. The ratings also acknowledge NPHC's third quarter earnings announcement, in which the company reported pre-tax incurred losses of $5.4 million (net of reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. ) as a result of Hurricanes Dennis, Katrina and Rita. In addition, NPHC has been assessed $2.1 million in the third quarter of 2005 by Citizens Property Insurance Corporation (Citizens). The Company has since determined that $2,030,551 of this amount is recoverable under its reinsurance treaties, and accordingly, the Company has recorded a pre-tax charge of $114,566--net of reinsurance -- in the third quarter of 2005 related to the Citizens' assessment. NPHC's loss ratio increased from 29.4% to 53.7% as a result of the three hurricanes experienced in the quarter. At this time, the company also announced expected loss estimates from Hurricane Wilma which, including reinstatement premiums, are estimated to be in the range of $8.0 to $9.5 million (pre-tax), net of reinsurance. These loss events reflect the inherent risk associated with NPHC's significant geographic concentration in the state of Florida. Additionally the ratings reflect the added financial flexibility and vastly improved financial leverage at NPHC, which considers its ready access to capital and the recent paydown of holding company debt. Approximately $23 million of the net proceeds from the IPO were used to retire outstanding bank debt previously issued at NPHC. The stable rating outlooks assigned to these companies reflect A.M. Best's expectations that both NPIC and NPCIC will maintain conservative underwriting leverage and also reflect the positive near-term earnings potential of both companies. For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. 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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