AM Best Confirms Credit Ratings for Hartford Steam Boiler Group Members



OLDWICK, New Jersey – (COMMERCIAL THREAD) –AM Best confirmed the financial strength rating (FSR) of A ++ (superior) and the long-term issuer credit rating (long-term ICR) of “aa +” (superior) of the members of the Hartford Steam Boiler Group (HSB). The outlook for these credit ratings (ratings) is stable. (See below for a detailed list of companies.)

HSB’s ratings reflect the strength of the group’s balance sheet, which AM Best ranks as the strongest, as well as its very good operational performance, favorable business profile and very good corporate risk management.

HSB’s assessment of balance sheet strength continues to be underpinned by its highest level risk-adjusted capitalization, as measured by Best’s capital adequacy ratio (BCAR), as well as its good liquidity. , its prudent investment allocations and a history of positive reserve development.

The group has shown favorable operating results for a long time. HSB’s five-year return on equity (ROE) of 15.1% is significantly better than the five-year composite commercial real estate ROE of 5.9%. Its 10-year ROE of 19.0% also outperforms the composite 10-year ROE by 6.7%. Performance is primarily driven by strong underwriting returns and bolstered by a steady stream of investment income. The five-year average combined ratio of 87.5% significantly exceeds the 103.9% average posted by the commercial real estate composite over the same period. Losses suffered have always been kept at very low levels, although they have increased in recent years before decreasing in 2020, reflecting fewer significant losses and a lower number of claims. Technical margins in 2020 also benefited from a 2.8 percentage point reduction in the expense ratio which reflects improved administrative costs, lower travel and medical costs and the impact of reduction initiatives. expenses.

The group has a long standing reputation as a valued partner of insurance companies throughout the industry. This unique position allows the company to distribute its products throughout the United States, as well as in other markets. In addition, it enables its partners to access the specialist knowledge and innovative products that the group provides to the industry, including the Internet of Things (IoT) and other loss control solutions. In recent years, the group has developed innovative solutions in terms of cyber insurance and equipment breakdown contracts, including IoT, which have generated favorable returns.

The FSR of A ++ (Superior) and long-term ICRs of “aa +” (Superior) were confirmed with stable prospects for the following members of the Hartford Steam Boiler Group:

  • Hartford Steam Boiler Inspection and Insurance Company

  • The Boiler Inspection and Insurance Company of Canada

  • HSB Specialty Insurance Company

  • HSB Engineering Insurance Limited

AM Best also removed the FSR from A ++ (Superior) and the long-term ICR from “aa +” (Superior), each with a stable outlook, from The Hartford Steam Boiler Inspection and Insurance Company of Connecticut (Hartford, CT), as the company is a shell company which does not bear insurance risk.

This press release relates to credit ratings published on the AM Best website. For all rating information relating to the publication and relevant disclosures, including details of the office responsible for the publication of each of the individual ratings referenced in this publication, please see AM Best Recent rating activity Web page. For more information on the use and limits of credit rating opinions, please see Best Credit Score Guide. For more information on the proper use of Best’s credit scores, Best’s preliminary credit reports, and AM Best’s press releases, please see Guide to Proper Use of Best Ratings and Reviews.

AM Best is a global credit rating agency, news publisher, and data analytics provider specializing in the insurance industry. Based in the United States, the company operates in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information visit www.ambest.com.

Copyright © 2021 by AM Best Rating Services, Inc. and / or its affiliates. ALL RIGHTS RESERVED.


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