AM Best Upgrades Credit Ratings of Hamilton Re, Ltd. and Hamilton Insurance Designated Activity Company
- April 30, 2024 04:51 PM (EDT)
//BestWire// - AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Ratings to “a” (Excellent) from “a-” (Excellent) of Hamilton Re, Ltd. (Hamilton Re) (Pembroke, Bermuda) and Hamilton Insurance Designated Activity Company (Dublin, Ireland), each a wholly owned subsidiary of Hamilton Insurance Group, Ltd. (Pembroke, Bermuda) (collectively referred to as Hamilton). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
The ratings reflect Hamilton’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The upgrade of the Long-Term ICRs reflects Hamilton’s trend of increasingly favorable underwriting results, leading to organic capital generation, increased stability and overall balance sheet strength. The group has shown improving underwriting results consistently over the past five-year period while conservatively reserving, with a five-year net favorable reserve development, outperforming peers.
The very strong balance sheet strength assessment is supported by Hamilton’s strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). Recent strategic shifts that have been executed by the company, including a transition toward a more diversified underwriting portfolio, have helped the group achieve underwriting profitability, which previously weighed on Hamilton’s balance sheet strength. The very strong balance sheet assessment considers the group’s largely favorable history of reserve development and its history of reserving conservatively, above actuarial mid ranges. Hamilton’s balance sheet strength assessment of very strong also reflects its relatively high-risk investment strategy on the portion of invested assets managed by Two Sigma Investments, LP, an SEC-registered investment adviser.
The operating performance assessment of adequate is supported by Hamilton’s historical investment returns and underwriting results, which have trended favorably over the past five years as the group achieved underwriting profitability in 2023. Underwriting improvements have stemmed from the group’s diversification efforts and the favorable rate environment, as well as the reunderwriting measures across the business and the integration of the Pembroke Managing Agency platform at Lloyd’s acquired in 2019.
The business profile assessment of neutral is supported by Hamilton’s continued expansion of its diversified global insurance and reinsurance platform. Risk management capabilities are considered appropriate and in line with the group’s risk profile.
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.