Understanding Nautilus Insurance Company’s A.M. Best Rating

Selecting the right insurance company to protect your business or personal assets is an important decision. You want to choose a financially stable insurer that will be there when you need them. One way to evaluate an insurance company’s financial strength is to look at their A.M. Best rating.

What is A.M. Best?

A.M. Best Company is a global credit rating agency focused on the insurance industry. They analyze the financial stability of thousands of insurers and assign them ratings based on quantitative and qualitative factors. A.M. Best’s ratings are a trusted benchmark used by insurance brokers and policyholders to compare insurers.

Nautilus Insurance Company’s A.M. Best Rating

Nautilus Insurance Company holds an A+ (Superior) rating from A.M. Best with a Financial Strength Rating of XV. This places them among the most financially stable insurers in the industry.

Specifically, Nautilus Insurance Company has:

• An A.M. Best Financial Strength Rating of A+ (Superior)
• An Issuer Credit Rating of “aa-“
• A Financial Size Category of XV (over $2 billion in policyholder surplus)

Let’s break down what these ratings mean:

A.M. Best Financial Strength Rating

This rating reflects A.M. Best’s opinion of an insurer’s ability to meet ongoing insurance obligations. It focuses on balance sheet strength, operating performance, business profile, and enterprise risk management.

The rating scale is:

• A++, A+ (Superior)
• A, A- (Excellent)
• B++, B+ (Good)
• B, B- (Fair)
• C++, C+ (Marginal)
• C, C- (Weak)
• D (Poor)
• E (Under Regulatory Supervision)
• F (In Liquidation)
• S (Rating Suspended)

Nautilus’ A+ (Superior) rating is the second highest on this scale. It means A.M. Best believes the company has an excellent ability to meet their ongoing obligations to policyholders.

Issuer Credit Rating

This assesses the insurer’s ability to meet senior financial obligations and policyholder obligations. It may be thought of as a measure of “creditworthiness”.

The scale ranges from “aaa” (highest) to “c” (lowest). Nautilus’ “aa-” rating indicates A.M. Best has a high opinion of their financial strength and creditworthiness.

Financial Size Category

This indicates the size of an insurer based on their total adjusted capital and surplus. The scale ranges from I (under $1 million) to XV ($2 billion or greater).

Nautilus’ category XV confirms they have over $2 billion in surplus, placing them among the largest property and casualty insurers in the industry. More surplus generally indicates higher capacity to pay out large claims.

What The Rating Means For Policyholders

Nautilus’ A+ (Superior) rating tells us several things beneficial for policyholders:

• Strong balance sheet – The company has sufficient capital reserves to weather challenging financial periods and pay out claims.

• Quality underwriting standards – Nautilus has disciplined underwriting practices that provide long-term stability. They avoid high-risk policies that could jeopardize solvency.

• Experienced management – The executive team has deep expertise in the excess & surplus lines market. They’ve led the company successfully for many years.

• Commitment to risk management – Nautilus invests heavily in risk management programs to monitor threats across the enterprise. This reduces the likelihood of major financial impacts from data breaches, natural disasters, litigation, and other perils.

• Oversight from a large parent company – Nautilus is part of W.R. Berkley Corporation, a Fortune 500 company. This provides additional financial strength and resources if ever needed.

The Longevity of Nautilus’ A.M. Best Rating

Nautilus has maintained its A+ (Superior) rating for over 15 years, illustrating its long track record of financial stability:

• 2007 – A.M. Best affirms A+ (Superior) rating
• 2008 – Rating affirmed again amidst global financial crisis
• 2012 – Again affirms rating after acquiring ISMIE Mutual Insurance Company
• 2015 – Rating reaffirmed following acquisition of Preferred Concepts Insurance Company
• 2022 – Current affirmation of A+ (Superior) rating

The company has successfully preserved its rating through various economic cycles and corporate changes.

What Goes Into The A.M. Best Rating?

Assigning a rating is a rigorous, ongoing process by A.M. Best analysts. They gather extensive quantitative and qualitative data on the company.

Quantitative Factors

• Capital adequacy – Total adjusted capital relative to risk, measured by BCAR (Best’s Capital Adequacy Ratio)
• Liquidity – Quality of investments, cash balances, financial flexibility
• Profitability – Operating gains and losses over time
• Leverage – Degree of financial leverage and debt servicing ability
• Reserve adequacy – Sufficiency of reserves to cover claim obligations
• Reinsurance – Use of reinsurance to mitigate insurance risk

Qualitative Factors

• Business profile – Market position, niche expertise, geographic spread of business
• Risk management – Risk controls, underwriting guidelines, catastrophe exposure monitoring
• Corporate strategy – Strategic goals, risk tolerance, financial flexibility
• Management experience – Expertise of executive team and board of directors

Analyzing all these factors provides a 360-degree view of the insurer’s financial strength and creditworthiness. This granular approach results in a rating that genuinely reflects solvency.

The Importance of Financial Strength to Policyholders

Ultimately, Nautilus’ A+ (Superior) A.M. Best rating gives policyholders confidence that claims will be paid in full and on time. It provides peace of mind that you’ve chosen a stable insurer with the financial resources to fulfill obligations. Even in worst-case events like natural catastrophes or economic crises, Nautilus is positioned to take care of customers without disruption.

For most businesses and individuals, the financial strength and creditworthiness of your insurer is too important to leave to chance. An A+ A.M. Best rating signifies that Nautilus Insurance Company has the capital reserves, underwriting discipline, risk management, and experienced leadership to offer the financial security you seek.