Best’s News & Research Service - August 04, 2023 10:34 AM (EDT)
AM Best Affirms Credit Ratings of The Hartford Steam Boiler Group’s Members
- August 04, 2023 10:34 AM (EDT)
Oldwick //BestWire// - AM Best has affirmed the Financial Strength Rating (FSR) of A++ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa+” (Superior) of the members of The Hartford Steam Boiler Group (HSB). The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed listing of the companies.)
The ratings reflect HSB’s balance sheet strength, which AM Best assesses as strongest, as well as its very strong operating performance, favorable business profile and very strong enterprise risk management.
HSB consistently maintains risk-adjusted capitalization that is consistent with the group’s overall strongest balance sheet assessment, as measured by Best’s Capital Adequacy Ratio (BCAR). HSB’s very strong operating performance assessment is supported by consistently excellent profitability metrics, which have outperformed the commercial property composite by a wide margin for a prolonged period of time. The very strong overall operating performance is driven primarily by superior underwriting returns and enhanced by a steady stream of investment income. HSB’s five-year average combined ratio of 86.6% significantly outperforms the 98.8% average posted by the commercial property composite over the same period. Underwriting margins have improved in each of the past three years, reflecting continued strong results in the group’s core commercial equipment breakdown business, despite inflationary pressure, strong results in HSB’s fast-growing cyber protection businesses and improved performance in Home Systems Protection and Service Line due to prior underwriting actions taken.
The group has a long-standing reputation as a valuable partner to insurance companies throughout the industry. This unique position allows the company to distribute its products throughout the United States, Canada and the United Kingdom, as well as in other markets. Additionally, it allows its partners to access the specialized knowledge and innovative products the group provides to the industry, including Internet of Things (IoT) and other loss-control solutions. In recent years, the group has developed innovative solutions to cyber insurance and equipment breakdown policies, including IoT, which have produced favorable returns. HSB is generating most of its growth in areas outside of its core industrial equipment breakdown coverage. The group’s fastest growing business line is its suite of cyber coverages, which it views as a natural adjacency to its core expertise in technical risks and risk management services. HSB manages the associated cyber risk accumulation through a combination of carefully tailored policy forms, cyber risk management services for the end insureds and a targeted risk selection strategy, as well as a sound risk management framework that includes the use of a proprietary capital model, strong reinsurance protection and defined risk tolerances.
The FSR of A++ (Superior) and the Long-Term ICRs of “aa+” (Superior) have been affirmed with stable outlooks for the following members of The Hartford Steam Boiler Group:
- The Hartford Steam Boiler Inspection and Insurance Company
- The Boiler Inspection and Insurance Company of Canada
- HSB Specialty Insurance Company
- HSB Engineering Insurance Limited
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 Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.