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AM Best Affirms Credit Ratings for National Lloyds Insurance Company and American Summit Insurance Company

May 23, 2019

OLDWICK, N.J.--(BUSINESS WIRE)--May 23, 2019--

AM Best affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a” of National Lloyds Insurance Company (National Lloyds). Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” of American Summit Insurance Company (American Summit), National Lloyds’ affiliate. The outlook of these Credit Ratings (ratings) is negative. National Lloyds and American Summit are domiciled in Dallas, TX and are subsidiaries of Hilltop Holdings Inc. (HTH) (NYSE:HTH), a financial holding company based in Texas.

The ratings reflect National Lloyds and American Summit’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The negative outlooks reflect AM Best’s concern over the companies’ deteriorating risk-adjusted capitalization due to significant dividend payments to its parent company in recent years. Risk-adjusted capitalization has declined due to an aggressive capital management strategy implemented by HTH. AM Best expects the parent company to support the operating companies if needed.

National Lloyds has experienced frequent and severe weather-related events in recent years that have driven the volatility in underwriting results, a reflection of geographic concentration of its book of business. In addition, the company continues to report above-average expenses related to investments in technology and a number of one-time expenses from the relocation of its office to Dallas, TX.

American Summit reported an operating loss in 2018 due to severe weather events; however, in past years the company reported generally positive operating results generated by favorable underwriting profitability and steady but significantly reduced investment income, other income and capital gains.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings . For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases .

AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com:https://www.businesswire.com/news/home/20190523005424/en/

CONTACT: Janet Hernandez

Senior Financial Analyst

+1 908 439 2200, ext. 5767

janet.hernandez@ambest.comJoseph Burtone

Director

+1 908 439 2200, ext. 5125

joseph.burtone@ambest.comChristopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.comJim Peavy

Director, Public Relations

+1 908 439 2200, ext. 5644

james.peavy@ambest.com

KEYWORD: UNITED STATES EUROPE NORTH AMERICA NEW JERSEY

INDUSTRY KEYWORD: PROFESSIONAL SERVICES BANKING FINANCE INSURANCE

SOURCE: AM Best

Copyright Business Wire 2019.

PUB: 05/23/2019 09:11 AM/DISC: 05/23/2019 09:11 AM

http://www.businesswire.com/news/home/20190523005424/en

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