AM Best

AM Best Affirms Credit Ratings of Hiscox Ltd and Its Subsidiaries


Yevgine Asatryan
Senior Financial Analyst
+44 20 7397 0316

Catherine Thomas
Senior Director, Analytics
+44 20 7397 0281

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

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


OLDWICK - MARCH 14, 2019 12:42 PM (EDT)
AM Best has affirmed the Financial Strength Rating 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), Hiscox Insurance Company Inc. (HICI) (Chicago, Illinois, USA), and Lloyd’s Syndicate 33 (Syndicate 33) (United Kingdom), which is managed by Hiscox Syndicates Limited. At the same time, AM 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.

The ratings of Hiscox reflect the group’s consolidated balance sheet strength, which AM Best categorises as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management. The ratings of Hiscox Bermuda, Hisco, Hiscox Guernsey and HICI reflect their strategic importance to Hiscox, as well as their strong integration within the group. The ratings of Syndicate 33 reflect the balance sheet strength of the Lloyd’s market, which AM Best categorises as very strong, as well as the market’s strong operating performance, favourable business profile and appropriate risk management. The Lloyd’s market rating is the floor for all syndicate ratings, reflecting the Lloyd’s chain of security and, in particular, the role of the Central Fund, which partially mutualises capital at the market level.

Hiscox group is an international (re)insurer with a good brand and a diversified book of business. The group has a strong presence in the Lloyd’s market, primarily through Syndicate 33, which is one of the largest Lloyd’s syndicates based on 2017 gross written premiums (GWP). For the 2019 year of account, the syndicate’s capacity decreased to GBP 1.5 billion (2018: GBP 1.6 billion), as conditions remained challenging in the London market.

Hiscox’s balance sheet strength is underpinned by consolidated risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The balance sheet strength assessment is supported by the group’s good financial flexibility, strong liquidity profile and prudent reserving strategy. The group has a track record of strong earnings, demonstrated by a five-year weighted average combined ratio of 91% and a return on equity of 13%, over the period 2013-2017. An offsetting rating factor is the group’s exposure to losses from catastrophe events, which has, however, reduced over the recent years, as the group has increased the proportion of the more stable retail business in its portfolio. Based on 2018 preliminary results, the group reported strong GWP growth of 15% and a robust combined ratio of 95%, with the London market business performing notably well.

This press release relates to Credit Ratings that have been published on AM 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 AM 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 AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry.

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