Operating companies upgraded to A
The financial strength rating of operating companies of Hiscox have been updgraded to A (excellent) from A- (Excellent) by AM Best.
The companies were: Hiscox Insurance Company (Bermuda), Hiscox Insurance Company and Hiscox Insurance Company (Guernsey), all operating companies of Hiscox Ltd. (Bermuda).
A.M. Best has also affirmed the financial strength rating of A (Excellent)of Hiscox Insurance Company (Hiscox US), the group’s admitted U.S. insurer. The outlook for all ratings is stable.
AM Best said: "The financial strength of the Hiscox operating companies is supported by the excellent consolidated risk-adjusted capitalisation of the group’s ultimate parent holding company, Hiscox Ltd. The companies draw additional benefit from a series of internal reinsurance agreements and from enhancement to the business profile the companies have in their respective markets resulting from their membership of the Hiscox group.
"A.M. Best has upgraded the ratings of Hiscox Bermuda because risk-adjusted capitalisation is stronger and has stabilised earlier than anticipated following its 2005 start, partly as a result of lower growth in net written premiums. The company has not paid a dividend since it began trading in 2005, allowing strong growth in capitalisation through the retention of earnings.
"A.M. Best believes that risk-adjusted capitalisation is likely to continue to be supported by strong financial results. The upgrades are also driven by the nature of Hiscox Bermuda’s underwriting portfolio, which is more highly correlated with the rest of the Hiscox group than A.M. Best originally expected. The company benefits from internal group reinsurance ceded from Hisco, Hiscox Guernsey and Hiscox Dedicated Corporate Member Limited (a capital provider to Lloyd’s Syndicate 33, managed by Hiscox Syndicates Limited). The reinsurance ceded to Hiscox Bermuda from other group members provides the company with a widely diversified book of international business that has a proven track record of profitability."
It added: "Hiscox Bermuda is expected to increase the proportion of its business from these sources during 2008. In addition, the company writes an external book of property catastrophe reinsurance risks, many of which are also underwritten by syndicate 33."
