A.M. Best Upgrades Issuer Credit Rating of Hiscox Insurance Company, Inc.
OLDWICK, N.J. -- December 13, 2012
A.M. Best Co. has upgraded the issuer credit rating (ICR) to “a+” from “a” and
affirmed the financial strength rating of A (Excellent) of Hiscox Insurance
Company, Inc. (HICI) (Chicago, IL). The outlook for both ratings is stable.
The ratings of HICI reflect the consolidation of HICI and its inactive
subsidiary, Bracken Hill Specialty Insurance Company.
The upgrading of HICI’s ICR reflects the same rating action for HICI’s
affiliate, Hiscox Insurance Company (Bermuda) Limited (Hiscox Bermuda), which
provides substantial quota share reinsurance to HICI. These ratings are based
upon A.M. Best’s criteria, “Rating Members of Insurance Groups,” and take into
consideration the role and strategic importance of HICI to its Bermudian
parent holding company, Hiscox Ltd. (Hiscox), and its overall U.S. strategy.
The ratings also acknowledge the explicit support provided to HICI by Hiscox
Bermuda as well as a guarantee on all third party reinsurance recoverables
with Hiscox. The ratings also recognize the implied commitment from Hiscox
that it will provide future support to HICI if needed.
HICI continues to maintain a strong level of stand-alone capitalization, which
is driven by low underwriting leverage and minimal investment leverage. A.M.
Best will continue to monitor the operating performance of HICI going forward,
given that its recent premium and exposure growth has occurred during a period
of competitive market conditions.
Positive rating actions for HICI are unlikely in the near term. Factors that
may lead to negative rating actions include a material deterioration in the
company’s risk-adjusted capitalization, significant weakening in its operating
results, any negative rating actions taken on Hiscox Bermuda and/or any
lessening of support (implied or explicit) provided to HICI by Hiscox.
The methodology used in determining these ratings is Best’s Credit Rating
Methodology, which provides a comprehensive explanation of A.M. Best’s rating
process and highlights the different rating criteria employed in the rating
process. Best’s Credit Rating Methodology can be found at
Founded in 1899, A.M. Best Company is the world’s oldest and most
authoritative insurance rating and information source. For more information,
Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
A.M. Best Co.
Kenneth Monahan, 908-439-2200, ext. 5342
Joseph Roethel, 908-439-2200, ext. 5630
Assistant Vice President
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
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