Abstract: First Non Profit Insurance Company Ratings has been reviewed to a positive position by A.M.Best Company, a leading financial and credit rating company. This article would try to present the latest market picture.
First Non Profit Insurance Company Ratings – A Positive Outlook
First Non Profit Insurance Company Ratings are upgraded by A.M.Best Company during its last review session in the month of November, 2007. Prior to this review, the company had a financial rating of B++ which means “Good”. But A.M.Best has changed this rating to A- meaning “Excellent”. Issuer Credit rating of the company has also improved to “a”.
First Non Profit Insurance Company Ratings – Factor behind Upgradation
Recent merger deal between First Non-Profit Holding Company (FNHC), parent concern of First Non Profit Insurance Company (FNIC), and Mutual Insurers Holding Company (MIHC) has helped the company to improve its stable rating to an excellent one. According to this business deal, fully owned subsidiary of MIHC, Milwaukee Insurance Company, would be merged with FNIC. The deal was finalized and documented on 15.11.07.
Merger of FNIC and MIC – Its Positive Effects
Merger decision between the two concerns is expected to pay-off First Non Profit Insurance Company immensely.
FNIC has utilized the excess capital of Milwaukee Insurance Company (MIC) for increasing its market capitalization.
FNIC has considerably reduced its dependence on reinsurance. This has been materialized due to a major commutation of reinsurance by MIC, the then affiliated company of Unitrin, on 01.01.07.
First Non Profit Insurance Company – Still remaining Black Spots
First Non Profit Insurance Company still suffers from some major glitches like:-
Continuation, though reduced, of heavy dependence of FNIC on reinsurance
Volatility in its earnings
Development of a loss reserve which has adverse effects on the company’s financial health
Conclusion
Financial as well as Credit rating of First Non Profit Insurance Company has improved in the very recent past mainly due to its merger with Milwaukee Insurance Company. This has helped the company to upgrade its capital quality which in turn made A.M.Best Company to review its previous rating and upgrade it to a positive one.