AM Best has kept its Financial Strength Rating of A- (Excellent) and Long-Term Issuer Credit Rating of “a-” (Excellent) for NASW Insurance Co. (NASWIC), based in Washington, D.C., but the ratings remain under review with negative implications. This means there’s some uncertainty about the company’s future.
NASWIC has a strong balance sheet and solid operating results, according to AM Best. However, the rating agency is concerned about how NASWIC will perform on its own after parting ways with Preferra Insurance Company Risk Retention Group (RRG) in 2024. Until now, NASWIC acted as a reinsurer for Preferra RRG, and both companies worked closely together along with NASW Insurance Co.’s parent, NASW Assurance Services Inc., which provided administrative and marketing help.
The relationship between NASWIC and Preferra hit a rough patch, leading to legal action. In August, they announced they had settled their disputes and agreed to go separate ways, though the details were kept private. Because of this split and the delays caused by the legal process, NASWIC has needed more time to prepare to operate independently. AM Best is watching how NASWIC’s management develops a new risk retention group and works with D.C. regulators on the necessary applications.
In the meantime, NASWIC is actively promoting its services and trying to grow through a partnership with Hartford, aiming to boost its insurance offerings. Meanwhile, Preferra continues to serve social workers and has set up new reinsurance deals.
AM Best will keep an eye on NASWIC’s progress as a standalone insurer before making any final changes to its ratings. The situation remains uncertain, but NASWIC is taking steps to move forward on its own.