DUFF & PHELPS: NORTHWESTERN NATIONAL CASUALTY COMPANY CLAIMS PAYING ABILITY RATING LOWERED TO 'A-' FROM 'A'
CHICAGO, Sept. 13 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has lowered the claims paying ability rating of Northwestern National Casualty Company (NNCC) from `A' (Single-A) to `A-' (Single-A-Minus). This rating action is based on continued unfavorable operating results for NNCC. While NNCC remains in the high claims paying ability rating class, the deterioration in the company's results has reduced surplus growth and increased operating leverage over the last several years. NNCC is the primary property-casualty insurance subsidiary of Northwestern National Holding Company NNHC, an insurance holding company for all the active insurance operations of Armco Inc. Armco has renewed its focus on core specialty steel businesses for the last several years, and is trying to sell NNHC and its subsidiaries. Armco currently has a senior debt rating of `BB' (Double-B) with Duff & Phelps Credit Rating Co. NNCC reported admitted assets of $343 million and policyholders' surplus of $70 million at June 30, 1993. Underwriting results were poor for the last two years relative to the company's historical performance due to increased catastrophic losses, a poor pricing environment, and high operating expenses. The company's reported combined ratio was 123.1 percent in 1991 and 117.7 percent in 1992. Policyholders' surplus declined from $77.7 million at year-end 1990 to $65.5 million at year- end 1992. This reduction in surplus promoted a corresponding increase in operating leverage. The ratio of net written premium to policyholders' surplus was somewhat high at 2.53 times at year end 1992. Underwriting results have improved somewhat in 1993 as the combined ratio was 112.4 percent for the first six months of the year. NNCC reported operating income of $2.6 million on earned premium of $81.3 million. The company also experienced $2.9 million in realized capital gains during the period. -0- 9/13/93 /CONTACT: James B. Auden, CFA, 312-368-3146, or Timothy A. Bienek, 312-368-3191, both of Duff & Phelps Credit Rating Co./ (AS)
CO: Northwestern National Casualty Company ST: Wisconsin IN: INS SU: RTG
CK -- NY051 -- 1279 09/13/93 11:58 EDT
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|Date:||Sep 13, 1993|
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