AM Best

A.M. Best Affirms Credit Ratings of Hiscox Ltd and Its Subsidiaries


Konstantin Langowski
Financial Analyst
+44 20 7397 0318

Edin Imsirovic
Senior Financial Analyst
+1 908 439 2200, ext. 5740

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644


LONDON - MARCH 02, 2018 11:50 AM (EST)
A.M. Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” of Hiscox Insurance Company (Bermuda) Limited (Hiscox Bermuda), Hiscox Insurance Company Limited (Hisco) (United Kingdom), Hiscox Insurance Company (Guernsey) Limited (Hiscox Guernsey) and Hiscox Insurance Company, Inc. (HICI) (Chicago, Illinois, USA). At the same time, A.M. Best has affirmed the Long-Term ICR of “bbb+” of Hiscox Ltd (Hiscox) (Bermuda), the ultimate non-operating holding company of the Hiscox group of companies. The outlook of these Credit Ratings (ratings) remains stable.

Concurrently, A.M. Best has commented that the ratings of Lloyd’s Syndicate 33 (United Kingdom) remain unchanged. The syndicate is managed by Hiscox Syndicates Limited, and its ratings reflect the financial strength of the Lloyd’s market which underpins the security of all syndicates.

The ratings reflect Hiscox’s consolidated balance sheet strength, which A.M. Best categorises as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM). Hiscox Bermuda, Hisco, Hiscox Guernsey and HICI are integrated with and strategically important to Hiscox.

Hiscox’s balance sheet strength is underpinned by consolidated risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio. The balance sheet strength assessment also factors in the group’s good financial flexibility and strong liquidity profile. Hiscox has a strong earnings track record, as demonstrated by a five-year weighted average combined ratio of 85% (2012-2016) and an average return on equity of 16% over the same period. A.M. Best expects prospective underwriting performance to remain strong, albeit subject to volatility due to exposure to catastrophe risk. The group reported a pre-tax profit of GBP 31 million for year-end 2017 (2016: GBP 355 million). The decline in profitability predominantly reflects the group’s losses from a number of natural catastrophe events, including hurricanes Harvey, Irma and Maria, as well as the impact of foreign exchange movements. However, the large losses from catastrophe-exposed lines were partly offset by good underwriting results from Hiscox’s retail book.

Hiscox benefits from good product and geographical diversification and strong brand recognition in key markets. The group continues to increase the proportion of more stable retail business in its portfolio as a response to the challenging market environment for London Market insurance and reinsurance business, which is characterised by abundant capacity and strong competitive pressures from both traditional and alternative markets.

This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.

Related Companies

For information about each company, including the Best's Credit Reports, group members (where applicable) and news stories, click on the company name. An additional purchase may be required.