AM Best has upgraded the Financial Strength Rating to B++ (Good) from B+ (Good) and the Long-Term Issuer Credit Rating to “bbb” (Good) from “bbb-” (Good) of National Unity Insurance Company (National Unity) (San Antonio, TX). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.

The ratings reflect National Unity’s balance sheet strength, which AM Best assesses as adequate, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

These rating upgrades reflect a revision of National Unity’s operating performance assessment to strong from adequate. This is the result of demonstrated consistency in the company’s operating results in recent years resulting from strategic initiatives that included completing the runoff of its domestic non-standard auto business. Since exiting this line of business, National Unity has focused on returning to its expertise, underwriting its non-resident personal auto and commercial auto segments. This has led to five straight years of strong underwriting income. While 10-year average operating metrics are negatively impacted due to volatility, the five-year averages compare favorably to the company’s peers due to its consistency since completing its runoff.

In addition, the National Unity’s improved operating performance has resulted in better balance sheet metrics, as additions to policyholders’ surplus have been reported in each of the past five years. Furthermore, the ratings reflect management initiatives implemented to reduce volatility and focus on the company’s niche business lines. These positive rating factors are partially offset by a somewhat elevated expense ratio; however, National Unity’s pure loss ratio has continuously improved in recent years.

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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