OLDWICK, New Jersey– (BUSINESS WIRE) –
AM Best assigned a preliminary credit score (PCA) to Omaha National Insurance Company (ONIC) (Omaha, NE) with a financial strength rating of A-pca (Excellent) and a long-term issuer credit rating of “a-” pca (Excellent). The outlook attributed to these PCAs is stable.
The BCPs reflect the strength of ONIC’s balance sheet, which AM Best considers to be very strong, as well as its adequate operational performance, limited business profile and appropriate enterprise risk management (ERM).
The very strong balance sheet valuation reflects ONIC’s highest level of risk-adjusted capitalization, as measured by Best’s capital adequacy ratio (BCAR), on a pro forma basis for a $ 35 million capital contribution from the intermediary parent company of the company, Omaha National Group, Inc. (NGO), following his August 2021 The issuance of Series B convertible preferred shares and the planned issuance of a $ 20 million external surplus note. While NGO is capitalized primarily with convertible preferred shares, resulting in high financial leverage as per AM Best guidelines, PCAs recognize the characteristics of convertible NGO preferred shares, the parent company’s adequate liquidity position and the continued capital support from investors.
AM Best assesses the operational performance of the company as adequate based on the historical results of ONIC since its inception in October 2017 and its well-defined business plan, and considers a level of execution risk associated with the company’s plan to begin writing business produced by its affiliate managing general agent, Omaha National Underwriters, LLC (UN), on a direct basis. ONIC assumes all of its premium through a quota agreement with an unaffiliated border carrier, Preferred professional insurance company (PPIC). The business is produced by the UN, which manages all aspects of policies sold through PPIC. AM Best considers that the commercial profile of the company is limited because ONIC is a single line insurer of insurance against accidents at work with a geographical concentration in California. ONIC’s ERM capabilities benefit from rigorous claims monitoring, established risk tolerance levels and strict underwriting guidelines.
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Robert valentina, CPCU
Senior Financial Analyst
+1 908 439 2200, ext. 5291
Manager, Public Relations
+1 908 439 2200, ext. 5159
Jacqalene Lentz, CPA
+1 908 439 2200, ext. 5762
+1 908 439 2200, ext. 5644
Source: AM Best