A.M. Best Affirms Credit Ratings of The Hartford Steam Boiler Group’s Members

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has affirmed the Financial Strength Rating (FSR) of A++ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa+” of the members of The Hartford Steam Boiler Group (HSB). The outlook of these Credit Ratings (ratings) remains stable. (See below for a detailed listing of the companies.)

The ratings reflect HSB’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its very strong operating performance, very favorable business profile and very strong enterprise risk management (ERM).

HSB’s superior level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), coupled with strong financial and operating leverage, as well as historical trend in strength of reserves collectively contribute to an overall balance sheet assessment of strongest by A.M. Best. Additionally, consistently favorable earnings, including investment income, lead to an overall operating performance assessment of very strong.

A.M. Best views HSB’s business profile as very favorable due to the company’s unique market profile, geographical diversification and market penetration. HSB is a leading provider of equipment breakdown (boiler and machinery), specialty engineering insurance and equipment inspection services, and it continues to maintain this position with superior loss control capabilities, technical expertise and a unique equipment failures database.

The rating affirmations also reflect the group’s synergies with Munich Reinsurance America, Inc. and its ultimate parent, Munich Reinsurance Company (Munich Re). HSB’s relationship with Munich Re has provided access to new markets. Furthermore, HSB’s robust ERM practices receive additional benefits from Munich Re’s extensive ERM resources. HSB’s historically strong underwriting results are a testament to the group’s superb risk management capabilities. A.M. Best assessed the company’s ERM as very strong.

HSB Group’s product expansion and enhancement efforts, beyond its core business line, include homeowners and farmowners equipment breakdown coverage; employment practices liability; insurance for renewable energy facilities; and identity recovery, data compromise and cyber liability coverages.

A.M. Best believes that the members of HSB Group are well-positioned at the current rating level. However, positive rating actions could occur if there were upward rating movement at the ultimate parent level. Factors that may lead to negative rating actions include a sustained, material deterioration in operating performance or substantial deterioration in risk-adjusted capitalization.

The FSR of A++ (Superior) and the Long-Term ICRs of “aa+” have been affirmed for the following members of The Hartford Steam Boiler Group:

The Hartford Steam Boiler Inspection and Insurance Company
The Hartford Steam Boiler Inspection and Insurance Company of Connecticut
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 A.M. 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 A.M. 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 A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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A.M. Best

Victoria Ohorodnyk, +1 908-439-2200, ext. 5326

Financial Analyst

victoria.ohorodnyk@ambest.com

or

Greg Reisner, +1 908-439-2200, ext. 5224

Director

greg.reisner@ambest.com

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Christopher Sharkey, +1 908-439-2200, ext. 5159

Manager, Public Relations

christopher.sharkey@ambest.com

or

Jim Peavy, +1 908-439-2200, ext. 5644

Director, Public Relations

james.peavy@ambest.com