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Fitch Assigns NYMAGIC 'BBB-' Debt Ratings.

CHICAGO -- Fitch Ratings Fitch Ratings

An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris.
 has assigned a 'BBB-' long-term issuer rating to NYMAGIC, Inc. (NYSE NYSE

See: New York Stock Exchange
:NYM Nym

humorous thief and rogue. [Br. Lit.: Merry Wives of Windsor; Henry V]

See : Thievery

1. (tool, networking) nym - /nim/ (From the third syllable of "anonymous"; or "nym server") A server that functions as an anonymous remailer.
). In addition, Fitch has assigned a 'BBB-' rating to NYMAGIC's outstanding $100 million of 6.5% senior notes due 2014. The Rating Outlook is Stable.

The ratings reflect NYMAGIC's competitive position in ocean marine insurance, favorable fa·vor·a·ble  
1. Advantageous; helpful: favorable winds.

2. Encouraging; propitious: a favorable diagnosis.

 operating results, conservative reserving, and low, albeit increasing, operating leverage Operating Leverage

A measurement of the degree to which a firm or project relies on fixed rather than variable costs.

The higher the degree of operating leverage, the greater the potential danger from forecasting risk.
. Weighted against these positives are uncertainties with respect to the company's expansion into specialty other liability lines, sizable reserves in exited business, and significant 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.  leverage.

NYMAGIC has a solid, niche position in ocean marine commercial insurance, with a primary focus on marine liability. The ocean marine line of business generally has a low frequency of claims but of a high severity, and, thus, underwriting Underwriting

1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt).

2. The process of issuing insurance policies.
 results can vary significantly from period to period, although NYMAGIC has successfully utilized reinsurance to limit its maximum loss.

NYMAGIC has been able to consistently achieve favorable underwriting results in recent years, posting GAAP GAAP

See: Generally Accepted Accounting Principles


See generally accepted accounting principles (GAAP).
 combined ratios under 100%, including 98.8% for full year 2004 and 99.5% for the first quarter of 2005. The notable exception was in 2001, when the company suffered losses in its aircraft line due to the events of Sept. 11 (World Trade Center event) and in its London operations. Both of these business lines were subsequently discontinued dis·con·tin·ue  
v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues
1. To stop doing or providing (something); end or abandon:
 in 2002.

NYMAGIC also opportunistically writes nonmarine liability insurance, including professional liability, excess workers compensation, and commercial auto liability. Fitch will carefully monitor the company's underwriting performance in the other liability line of business, as it has grown considerably in recent years to account for 36% of total company net premiums written in 2004, up from 23% in 2003 and 9% in 2002.

Overall, Fitch views the company as having conservative reserves, particularly in core lines, where the company has consistently posted favorable prior year reserve development. However, the company still has a sizable amount of reserves in run-off aircraft lines, accounting for 31% of gross and 18% of net reserves at Dec. 31, 2004. As a result, Fitch has some concern about the potential for adverse reserve development as these reserves run off over the next several years, although the company did experience favorable development in 2004 on its World Trade Center event reserves, that were booked at full limits and account for a majority of the company's aircraft reserves.

Operating leverage is conservative with a net written premium to surplus ratio of 0.75 times (x) at year-end 2004. This ratio has increased over the past five years from 0.19x at year-end 1999, as the company has added about $100 million in business writings, with statutory surplus declining slightly over the same period, as the company has paid out a significant amount of dividends to the holding company. Fitch expects the company to maintain operating leverage of 1.0x or lower, with surplus at current levels or higher.

NYMAGIC uses a significant amount of reinsurance to manage its overall risk and enable the company to compete with larger insurance companies. As a result, the company's reinsurance recoverables were relatively high at 142% of surplus as of Dec. 31, 2004, although down considerably from levels in 2001 and 2002. In addition, about 40% of the recoverables are secured by letters of credit or funds withheld and the overall credit quality is good.

At March 31, 2005, NYMAGIC's debt to total capital was 30%, which is within Fitch's 26%-30% expectation range for the current rating.

NYMAGIC, Inc. is a publicly traded holding company that owns and operates two specialty insurance companies, New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of
 Marine And General Insurance Company and Gotham Insurance Company, an excess and surplus lines company. NYMAGIC, Inc. also owns three entities that underwrite To insure; to sell an issue of stocks and bonds or to guarantee the purchase of unsold stocks and bonds after a public issue.

The word underwrite has two meanings.
 solely for the insurance companies, Mutual Marine Office, Inc., Pacific Mutual Marine Office, Inc., and Mutual Marine Office of the Midwest, Inc.

The following ratings for NYMAGIC, Inc. have a Stable Rating Outlook:

--Long-term issuer assigned 'BBB-';

--$100 million 6.5% senior notes due March 15, 2014 assigned 'BBB-'.
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Publication:Business Wire
Geographic Code:1USA
Date:May 13, 2005
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