AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Lexington National Insurance Corporation (Lexington National) (Stuart, FL).
The Credit Ratings (ratings) reflect Lexington National’s balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The revision of the outlooks to negative reflects a decline in Lexington National’s underwriting results in recent years that has resulted in underwriting and operating performance metrics falling short of the composite averages. Underwriting performance has been impacted negatively by volatility in loss experience, and an above average expense ratio driven by legal and underwriting expenses intended to mitigate losses and address various bail reform legislative efforts. Lexington National’s very strong balance sheet strength is supported by its strongest risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), which is offset somewhat by limited surplus growth due to annual stockholder dividends. The limited business profile reflects its concentration operating largely as a bail bond surety writer. AM Best views Lexington National’s ERM as appropriate for its risk profile, with close monitoring of agencies and legislative changes.
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 Guide to 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.
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