OREANDA-NEWS. Fitch Ratings has affirmed the 'A-' Insurer Financial Strength (IFS) rating of Greater New York Mutual Insurance Company (GNY) and its subsidiaries: Insurance Company of Greater New York, Strathmore Insurance Company and GNY Custom Insurance Company.

Fitch has chosen to withdraw the ratings of Greater New York Mutual Insurance Company, Insurance Company of Greater New York, Strathmore Insurance Company and GNY Custom Insurance Company for commercial reasons.

KEY RATING DRIVERS

GNY's rating is supported by a conservatively-structured balance sheet, characterized by low operating leverage, no financial leverage and a relatively low-risk investment portfolio. Balanced against these positive factors are GNY's small market position and material modeled catastrophe exposure.

GNY's market position and size/scale are categorized by Fitch as "small" based on net written premium of $272 million and policyholders' surplus of $444 million as of Dec. 31, 2015. Consequently, absent other mitigating factors, a company with this profile would typically carry an IFS rating in the 'BBB' category.

Fitch considers GNY's capitalization to be consistent with the current rating category. GNY's "Adequate" score on Fitch's Prism capital model is below guidelines for the company's current rating category, but is offset by operating leverage of 0.6 times, net leverage of 1.9 times and NAIC risk-based capital ratio of 378% of the company action level, all of which are considered better than median guidelines for GNY's current rating category. Natural catastrophe exposure is a key risk element that increases target capital levels for GNY under Prism, reflecting its commercial property insurance orientation and geographic business concentration.

GNY has reported modest unfavorable reserve development in 2015, concentrated in the commercial multi-peril line of business, amounting to $3.7 million or 1.5 percentage points on the combined ratio, breaking a streak of eight consecutive years of favorable reserve development. Approximately 80% of total reserves are related to shorter-tail commercial multi-peril claims, while most of the balance is in workers' compensation insurance.

GNY's combined ratio was 99.6% during 2015, including $22 million or approximately eight percentage points of catastrophe losses. Full year 2014's combined ratio was 99.1% also with $22 million in catastrophe losses. Net income was $17 million, down modestly from $20 million for 2014. GNY's return on surplus was modest at 3.9% for the full year 2015.

GNY has a niche providing habitational insurance to cooperative apartment buildings, condominium associations and apartment rental risks, and a wide variety of commercial classes of business. The company offers commercial multi-peril insurance predominantly in New York and New Jersey. The company has expanded over time into Midwest and Mid-Atlantic states. Approximately one-quarter of written premium is currently for business outside of New York and New Jersey.

RATING SENSITIVITIES
Not applicable

Fitch affirms and withdraws the following ratings:

Greater New York Mutual Insurance Company
Insurance Company of Greater New York
Strathmore Insurance Company
GNY Custom Insurance Company
--IFS at 'A-' and withdrawn.