AM Best Affirms Credit Ratings of Hiscox Ltd and Its Subsidiaries
AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a+” (Excellent) of
The ratings of Hiscox reflect the group’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM). The ratings of HIB, HICL, HIG and HICI reflect their strategic importance to Hiscox, as well as their integration within the group. The ratings of Syndicate 33 reflect the balance sheet strength of the Lloyd’s market, which AM Best assesses as very strong, as well as the market’s strong operating performance, favourable business profile and appropriate ERM. The Lloyd’s market rating is the floor for all syndicate ratings, reflecting the Lloyd’s chain of security and, in particular, the role of the
Hiscox group is an international insurer and reinsurer with good brand strength and a diversified book of business. The group has a strong presence in the Lloyd’s market, primarily through Syndicate 33, which is one of the largest Lloyd’s syndicates based on 2020 gross written premiums (GWP).
Hiscox’s balance sheet strength is underpinned by consolidated risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The balance sheet strength assessment also considers the group’s good financial flexibility and strong liquidity profile. The group has a prudent reserving strategy with a long history of reserve redundancy, but, in 2019 and 2020, positive development was largely negated by loss creep from 2018 catastrophes and a strengthening of
Despite poor performance in 2019 and 2020, driven by COVID-19-related losses and reserve strengthening on certain lines discussed above, the group has a strong track record of earnings evidenced by a 10-year (2011-2020) weighted average combined ratio of 96% and a return-on-equity ratio of 8%. The group produced a combined ratio of 115% and a loss after tax of
AM Best expects the group’s underlying performance to continue to demonstrate an improving trend in the short to medium term, as a result of portfolio re-balancing and hardening rates in key lines in Hiscox’s
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 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 specialising in the insurance industry. Headquartered in
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Source: AM Best
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