AM Best has affirmed the financial strength rating (FSR) of A (Excellent) and the issuer credit ratings (ICR) of “a+” of Hiscox Bermuda, Hiscox Insurance Company (Hisco) (United Kingdom), Hiscox Guernsey and Hiscox Insurance Company (HICI) (Chicago, Illinois, USA).
Concurrently the rating firm has affirmed the ICR of “bbb+” of Hiscox (Hiscox) (Bermuda), the ultimate parent holding company of the Hiscox group of companies. The outlook for the above ratings is stable.
AM Best has also affirmed the FSR of A (Excellent) and the ICR of “a+” of Lloyd’s Syndicate 33 (United Kingdom), which is managed by Hiscox Syndicates Limited (HSL). The outlook for both ratings remains positive.
According to AM Best, the ratings of Hiscox, Hiscox Bermuda and Hisco reflect the Hiscox group’s strong consolidated risk-adjusted capitalisation and robust performance record, as demonstrated by an average five-year combined ratio of 88 percent.
“Hiscox pursues a successful strategy of balancing volatile international catastrophe and large loss-exposed insurance and reinsurance business with more stable local retail business, which has supported its profitable performance in each of the past five years,” said the rating firm.
Prospective performance is expected to remain good, according to AM Best, although it said a return to average catastrophe experience and continued weaker pricing in the reinsurance sector are likely to lead to lower earnings, compared with the strong years of 2012-2014.
The ratings of Hiscox Bermuda and Hisco factor in the strategic importance of both companies to the Hiscox group. Each company has established a track record of good operating performance and has made a positive contribution to overall earnings during the past five years, said AM Best. Hiscox Guernsey and HICI receive explicit support from Hiscox Bermuda in the form of reinsurance protection.
AM Best added that the affirmation of the ratings of Lloyd’s Syndicate 33 reflects the underlying strength of the Lloyd’s market, as well as the syndicate’s strong performance record and enhanced financial flexibility from the support of Hiscox, which provides 72.5 percent of the syndicate’s capacity through its corporate member.
AM Best, Hiscox, North America, Bermuda