The ratings reflect The Hanover’s excellent risk-adjusted capitalization, stemming from consistently favorable operating earnings. Despite consistent dividend payments to THG in recent years, The Hanover has been able to increase surplus over the past five years through solid net investment income, and to a lesser degree, generally favorable underwriting performance. In addition, the ratings reflect the company’s prudent risk management and diversified product offerings, especially in the commercial and specialty segments of its book of business. The ratings also recognize moderate financial leverage and the financial flexibility at THG.
Partially offsetting these positive rating factors is The Hanover’s comparatively high underwriting leverage and somewhat elevated expense structure.
Previously, A.M. Best commented that both The Hanover and THG’s ratings were unchanged following the announcement in
The FSR of A (Excellent) and ICR of “a” have been affirmed for The Hanover Insurance Group Property and Casualty Companies and its following members:
AIX Specialty Insurance Company Allmerica Financial Alliance Insurance Company Allmerica Financial Benefit Insurance Company CampMed Casualty & Indemnity Company, Inc. of Maryland Citizens Insurance Company of America Citizens Insurance Company of Ohio Citizens Insurance Companyof the Midwest Citizens Insurance Company of Illinois The Hanover American Insurance Company The Hanover Insurance Company
- The Hanover Lloyd’s
Insurance Company The Hanover New Jersey Insurance Company Massachusetts Bay Insurance Company NOVA Casualty Company Professionals Direct Insurance Company Verlan Fire Insurance Company
The following debt ratings have been affirmed:
-- “bbb” on
-- “bbb” on
-- “bb+” on
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:
“Understanding BCAR for Property Casualty Insurers”; “Risk Management and the Rating Process for Insurance Companies”; “Catastrophe Analysis in A.M. Best Ratings”; “Rating Members of Insurance Groups”; “Catastrophe Risk Management Incorporated Within the Rating Analysis”; “Natural Catastrophe Stress Test Methodology”; “A.M. Best’s Ratings & the Treatment of Debt”; and “Equity Credit for
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