CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK, N.J. - NOVEMBER 23, 2011 12:00 AM (EST)
A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and issuer credit rating of "a" of Hiscox Insurance Company, Inc. (HICI) (Chicago, IL). The outlook for both ratings is stable. The ratings of HICI reflect the consolidation of HICI and its inactive subsidiary, Hiscox Specialty Insurance Company, Inc.
These ratings are based upon A.M. Best's group rating methodology and take into consideration the role and strategic importance of HICI to its Bermudian parent holding company, Hiscox Ltd.'s (Hiscox) overall U.S. strategy. The ratings also reflect the explicit support provided to HICI through substantial quota share reinsurance with an affiliate, Hiscox Insurance Company (Bermuda) Limited and a guarantee on all third-party reinsurance recoverables with Hiscox. The ratings also reflect the implied commitment from Hiscox that it will provide future parental support, if needed.
HICI continues to maintain strong stand-alone capitalization, which is driven by low underwriting leverage and negligible investment leverage. Going forward, A.M. Best will monitor the operating performance of HICI, given its premium and exposure growth during a period of competitive market conditions.
The principal methodology used in determining these ratings is Best's Credit Rating Methodology - Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best's rating process and highlights the different rating criteria employed. Additional key criteria utilized include: "Risk Management and the Rating Process for Insurance Companies"; "Understanding BCAR for Property/Casualty Insurers"; and "Rating Members of Insurance Groups." Methodologies can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.