A.M. Best Affirms Ratings of Principal Hiscox Ltd Operating Companies

Posted by on Nov 11, 2010 in Local News & Alerts | 0 comments

A.M. Best Europe — Rating Services Limited has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit rating (ICR) of “a” of Hiscox Insurance Company (Bermuda) Limited (Hiscox Bermuda), Hiscox Insurance Company Limited (Hisco) (United Kingdom) and Hiscox Insurance Company (Guernsey) Limited (Hiscox Guernsey), all operating companies of Hiscox Ltd (Bermuda). The outlook for all ratings remains stable.

The ratings of the Hiscox operating companies continue to reflect the strong consolidated risk-adjusted capitalisation of the group’s holding company, Hiscox Ltd.

In 2010, an increase in consolidated shareholders’ funds is anticipated (2009:GBP 1)(2009:121 million), in spite of total net losses of approximately GBP 110 million expected from the Chilean earthquake, Windstorm Xynthia and the Deepwater Horizon event. In addition, each rated operating entity benefits from excellent stand-alone risk-adjusted capitalisation and an excellent business profile, supported by membership of the Hiscox group.


The ratings of Hiscox Bermuda factor A.M. Best’s expectation of continued strong correlation between the main reinsurance business written by the company and that written by Lloyd’s Syndicate 33 (managed by Hiscox Syndicates Ltd).

In addition, the company’s technical performance benefits from internal reinsurance cessions of profitable and well-established business from Hisco and Hiscox Guernsey.

A good combined ratio is expected in 2010, albeit higher than the excellent 66% achieved in 2009.

The ratings of Hiscox Guernsey continue to reflect significant reinsurance support from Hiscox Bermuda.

The company also benefits from a strong business profile for its specialist lines of business, including kidnap and ransom and fine art.

Hisco is expected to return to underwriting profitability in 2010, supported by improved rating conditions for its main UK personal property business (2009:technical loss of GBP 3.3 million).

Despite the impact of Windstorm Xynthia, results are likely to benefit from a reduction in net claims incurred from European business, which experienced a number of large uncorrelated losses in 2009.

Hisco’s ratings also factor reinsurance support from Hiscox Bermuda.

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