NASW Insurance credit ratings cut as AM Best keeps negative review status
Washington, D.C.-based NASW Insurance Company faces a lower financial strength and issuer credit assessment as pressure on underwriting results weighs on its standalone outlook. The rating action also leaves the insurer under review with negative implications while management works to execute its business plans and complete regulatory steps tied to a risk retention group.
Highlights
- AM Best downgraded NASW Insurance Company’s Financial Strength Rating to B++ from A- and its Long-Term Issuer Credit Rating to bbb+ from a-, citing deteriorating underwriting results.
- NASWIC’s operating performance was revised to adequate from strong, reflecting starting 2025 underwriting issues and uncertainty about its standalone future performance.
- The ratings remain under review with negative implications, hinging on management’s plan execution, regulatory approval, and risk retention group formation.
Rating action and performance concerns
As reported by AM Best, the agency downgrades the Financial Strength Rating of NASW Insurance Company to B++ from A- and lowers the Long-Term Issuer Credit Rating to bbb+ from a-. The insurer's ratings remain under review with negative implications at the same time.AM Best says the ratings continue to reflect NASWIC's very strong balance sheet strength, along with adequate operating performance, a limited business profile and appropriate enterprise risk management. The downgrade in operating performance to adequate from strong reflects deteriorating underwriting results starting in 2025 and uncertainty over the company's future performance as a standalone entity.
Execution and regulatory risks remain in focus
AM Best says NASWIC's current metrics are now more consistent with peers assessed at the adequate level. The agency indicates that additional time is needed for management to fully execute prospective business plans.The negative review status also reflects the need for regulatory approval and the establishment of a risk retention group. That leaves the insurer's next rating direction tied to both operational execution and the outcome of pending regulatory steps.
In our earlier coverage of AM Best’s downgrade of Arrow Mutual Liability Insurance Company, we noted that the insurer’s Financial Strength Rating was cut to B++ from A- and its Long-Term Issuer Credit Rating was lowered to bbb+ from a-. The decision reflected a long history of underwriting losses, with 2025 results pressured by elevated expenses, even as the company maintained very strong capitalization and liquidity but faced constraints from a narrow monoline business profile.
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