A.M. Best Co. has affirmed the financial strength rating of B++ (Good) and issuer credit ratings of (eqnx:)bbb(eqnx:) of National General Insurance Corporation (NAGICO) N.V. (NAGICO) (St. Maarten) and Nagico Insurance Company Limited (NICL) (Anguilla). The outlook for all ratings is stable.

The ratings reflect NAGICO and NICL(eqnx:)s common ownership, adequate consolidated risk-adjusted capitalization, overall profitability in recent years and NAGICO(eqnx:)s dominant market presence in its domestic market. NAGICO is the leading property/casualty insurer in St. Maarten with a dominant market share in the Dutch Caribbean, while NICL is one of the leading insurers in several overseas markets.

On an individual and consolidated basis, the companies continue to report overall operating profits. Given their common parent company(eqnx:)s minimal dividend requirements, both NAGICO and NICL have been able to enhance capitalization through the retention of earnings. Consequently, both companies continue to maintain more than adequate risk-adjusted capitalization for their current business profiles. In addition, NAGICO and NICL have implemented adequate risk management policies and procedures to assess and manage risks throughout their operations.

Partially offsetting these favorable rating factors are the increasingly competitive regional markets in which NAGICO and NICL operate and the somewhat limited financial flexibility of both companies as a result of their private ownership structure. Both NAGICO and NICL, like other regional insurers, have significant exposure to catastrophic losses. Both companies manage this risk through the utilization of reinsurance to limit their catastrophe exposure to a manageable level and to protect their surplus against frequency of catastrophic events.

While the ratings of NAGICO and NICL are stable, factors that could contribute to rating enhancement include sustained improvement in their underwriting performance, consistent long-term overall profitability and an upgrade in St. Maarten(eqnx:)s and Anguilla(eqnx:)s country risk tier ratings.

Factors that may lead to negative rating actions include significant loss of consolidated market share, a sustained decline in underwriting profitability, significant deterioration in risk-adjusted capitalization as measured by A.M. Best(eqnx:)s capital model and a downgrade in St. Maarten and Anguilla(eqnx:)s country risk tier ratings.

The methodology used in determining these ratings is Best(eqnx:)s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best(eqnx:)s rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: (eqnx:)Understanding Universal BCAR(eqnx:); (eqnx:)Rating Members of Insurance Groups(eqnx:); (eqnx:)Assessing Country Risk(eqnx:); (eqnx:)Catastrophe Analysis in A.M. Best Ratings(eqnx:); (eqnx:)Understanding BCAR for Property/Casualty Insurers(eqnx:); and (eqnx:)Risk Management and the Rating Process for Insurance Companies.(eqnx:) Best(eqnx:)s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology .

Founded in 1899, A.M. Best Company is the world(eqnx:)s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com .

(Source http://www.marketwatch.com/story/am-best-affirms-ratings-of-national-general-insurance-corporation-nagico-nv-and-nagico-insurance-company-limited-2012-04-02)