Read the story and then we’ll look at one of the stories behind the story.
A.M. Best Co. has revised the outlook of Nationwide Group to negative from stable due in part to the historical impact of storm losses on the group coupled with reduced investment income.
The Oldwick, N.J.-based rating agency said it concurrently has revised the outlook to negative from stable and affirmed the debt ratings of “a” of the $1.5 billion in existing surplus notes of Nationwide Mutual Insurance Company.
Best said it considered the historical impact of storm losses on Nationwide Group’s underwriting performance as part of the outlook adjustment.
“A.M. Best expects management may be challenged to rebuild surplus based upon historical underwriting performance and reduced investment income given the current volatility in the financial markets,” Best said.
The rating agency also cited as a reason for the revised outlook the “precipitous decline in risk-adjusted capitalization associated with the early 2009 privatization of Nationwide Financial Services Inc. (NFS).” NFS is now a wholly-owned subsidiary of Nationwide Mutual after Nationwide Mutual completed its acquisition of all of the outstanding publicly held Class A shares of common stock of NFS following shareholder approval on Dec. 31, 2008…(all emphasis added)
One of the stories behind the story of Nationwide’s negative outlook is recorded on the docket of Mississippi’s Southern District Federal Court. Continue reading “Nationwide on the negative side”