AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of National Guaranty Insurance Company of Vermont (NGIC) (Burlington, VT).

The Credit Ratings (ratings) reflect NGIC’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).

The revision of the outlooks to positive recognizes NGIC’s favorable operating results over the past decade demonstrated by consistently strong underwriting and return on revenue metrics. The company has produced exceptional annual, five- and 10-year average combined ratios that outperformed the industry and its peers by wide margins. AM Best’s expectation is that NGIC will continue to produce favorable operating results prospectively, driven by the organization’s extensive loss controls, which have resulted in a loss-free history for the captive. The positive outlook also considers the continuation of NGIC’s very strong balance sheet, with organic surplus growth, and the company maintaining its strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR).

The ratings also reflect NGIC’s strategic role as the captive insurance company of Waste Management, Inc. (WM) [NYSE: WM], a leading provider of comprehensive waste management environmental services in North America. As a strategic and integral part of WM’s ERM program, the parent wholly funded the captive’s capitalization in the form of a demand note that generates net investment income to augment surplus annually. Further supplements have been provided in form of letters of credit as changes in exposures warrant. NGIC benefits from WM’s robust risk management strategies, which enable it to support a portion of WM’s financial assurance program efficiently and appropriately.

NGIC has a limited business profile and is licensed in two states and operates in 27 states as a non-admitted insurer to meet financial assurance obligations of its parent. The captive’s ERM is considered appropriate as a focused insurance company that leverages its expertise to benefit policyholders.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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