The ratings of the
Partially offsetting these positive rating factors is the group’s concentration of risk in the public housing authority sector, which magnifies the impact of market cycles, public policy and legislative changes. Another offsetting factor is the erosion in the group’s underwriting profitability over the most recent five-year period due to an increase in frequency and severity of claims. Furthermore, due to the prevailing low interest rate environment, investment income has also declined over the most recent five-year period, resulting in a decrease in the company’s total return metrics. As a result of these factors,
A negative rating impact could occur if underwriting performance shows a continued decline or demonstrates volatility that negatively affects earnings and capitalization over time. In addition, a negative rating impact may occur if there is a material shift in risk profile that could potentially undermine the stability and profitability of the company.
The ratings of HSIC reflect its strong capital position and the support it receives from the
A positive rating impact is likely if additional capital is infused, thus improving the company’s risk-based capital position. A negative rating impact could occur if underwriting performance declines and demonstrates volatility that negatively impacts earnings and capitalization over time. In addition, a negative rating impact could occur if there were a material shift in risk profile that could potentially undermine the stability and profitability of the company.
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Senior Financial Analyst
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Director, Public Relations