Ratings agency AM Best has affirmed the financial strength rating of A- (Excellent) of Hamilton Re (Bermuda), and has stated that the reinsurer is in a “solid position” for continued growth.
The outlook of Hamilton Re’s ratings is stable, and the rating reflects the reinsurer’s balance sheet strength, which AM Best categorises as very strong. It also reflects its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
“Hamilton Re’s very strong level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), coupled with strong liquidity and financial flexibility due to its access to a deep pool of private investors, collectively contribute to AM Best’s balance sheet assessment of very strong,” AM Best stated. “Hamilton Re’s investment portfolio performance, which has consistently generated market-leading returns that outperform the company’s peer composite, partially offset by expense driven underwriting losses, leads to an operating performance assessment of adequate.”
Positive rating movement could be achieved in the near to medium term through improved underwriting performance, achieved by leveraging Two Sigma Investment’s (TSI) data and predictive analytic capabilities and enabling the company to produce consistently favorable loss ratio experience, combined with improved economies of scale and solid risk-adjusted capitalisation.
Hamilton has multiple distribution platforms, including a Lloyd's syndicate and the Bermuda operating company, following the sale of Hamilton's two U.S. operating companies to AIG in October 2017.
The ratings agency suggested that although Hamilton Re is one of the newest players in the Bermuda market it has been successful at building brand recognition - a testament to its seasoned senior management team.
AM Best also noted that Hamilton benefits from its strategic relationship with AIG, under which the company has the opportunity to participate in an increased volume of AIG's ceded reinsurance business.
AM Best, Hamilton Re, AIG, Ratings, Bermuda