A.M. Best Affirms Ratings of BNY Trade Insurance, Ltd. and The Hamilton Insurance Corp.

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has affirmed the financial strength ratings of A (Excellent) and the issuer credit ratings of “a+” of BNY Trade Insurance, Ltd. (BNY Trade) (Hamilton, Bermuda) and The Hamilton Insurance Corp. (Hamilton) (New York, NY). The outlook for all ratings is stable.

The ratings of BNY Trade and Hamilton reflect each company’s strong capitalization, consistently excellent operating performance, solid liquidity and conservative operating strategy.

Partially offsetting these positive rating factors are the companies’ limited market scope, business profile and product mix, as well as its dependence on third parties for processing, servicing and administration. Somewhat offsetting these positive rating factors are the companies’ relatively large (gross) underwriting exposure, as they offer high-gross insurance limits and insure bankers’ professional liabilities and excess all risk property with substantial insured values.

Additionally, the ratings recognize BNY Trade’s and Hamilton’s robust enterprise risk management (ERM) frameworks, as they follow the ERM practices of their ultimate parent, The Bank of New York Mellon Corporation’s (BNY Mellon) [NYSE: BK], a leading global financial services company. The ratings also recognize the companies’ excellent business position, as a result of their close ties to BNY Mellon.

BNY Trade and Hamilton provide comprehensive reinsurance coverage and products to their parent, BNY Mellon. The companies’ reinsurance businesses have been placed with the world’s significant providers. BNY Trade and Hamilton benefit from BNY Mellon’s significant financial resources, extensive risk mitigation and safety programs, which have been implemented throughout the organization.

As the companies fully cede assumed risks to the commercial market, their exposure to net underwriting losses is minimal. Furthermore, the associated credit risk is limited through the use of highly rated reinsurers. The companies’ projected operating results indicate favorable returns, and their aggregate surplus base of more than $1.4 billion is more than adequate to support their asset and credit risk exposures. While BNY Trade’s excess bankers’ professional program and Hamilton’s excess all-risk cash and securities and excess all risk property coverages written offer significant insured values (considering the high coverage limits offered), the net impact could be burdensome. Nonetheless, this is mitigated by the historical fact that BNY Mellon has not experienced significant claims for these coverages in the layers insured by BNY Trade and Hamilton. Also, A.M. Best recognizes the low probability of such events, and the companies’ prospective risk-adjusted capitalizations are likely to remain strong, if these were to occur.

A.M. Best believes that BNY Trade and Hamilton are well-positioned at their current rating level, and the ratings and outlooks are not expected to be upgraded or downgraded in the near term. However, revisions to the ratings are likely to occur if there is material shift from their risk profiles that could potentially undermine the stability of the ratings and sudden changes to ownership, strategy, or significant changes in the companies’ financial condition caused by catastrophe.

Additionally, financial issues resulting in rating pressure on the parent company or deterioration on its credit profile could also impact BNY Trade’s and Hamilton’s ratings.

A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

This press release relates to rating(s) 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.

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

Copyright © 2016 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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A.M. Best

Alexander Sarfo, 908-439-2200, ext. 5779

Senior Financial Analyst

alexander.sarfo@ambest.com

or

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

Manager, Public Relations

christopher.sharkey@ambest.com

or

Gary A Davis, 908-439-2200, ext. 5665

Assistant Vice President

gary.davis@ambest.com

or

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

Assistant Vice President, Public Relations

james.peavy@ambest.com

Source: A.M. Best Company, Inc.