The outlook of these credit ratings is stable.
The ratings given to the property and casualty members of the group are reflective of the strength of its balance sheet, which A.M Best categorises as strongest.
It also takes into account the Houston Casualty Group’s strong operating performance, favourable business profile, and extremely strong risk management of the consolidated operations.
The ratings also recognise its risk management support provided by Tokio Marine & Nichido Fire Insurance, the lead insurance company in the Tokio Marine Holdings organisation.
HCC Life’s ratings reflect its very strong balance sheet strength, strong operating performance, neutral business profile, very strong enterprise risk management, as well as the enhancement it receives from its affiliation with the Houston Casualty Group.
A.M. Best adds: “While profitability ratios have declined over the past few years due to declining investment yields and a modest increase in its loss ratio, HCC Life’s disciplined underwriting approach and ongoing expense management has resulted in favorable earnings over the most recent five-year period.”
Offsetting these positive ratings fractionally is HCC Life’s focus in the medical stop-loss line of business—having exited short-term medical insurance, the company has been left with a modest amount of premiums and operating earnings outside of its medical stop-loss business.
According to A.M. Best, advancements in line of business diversification may result in improvement in the ratings.
Downward movement in the ratings could occur if there is a deterioration in underwriting results, adverse loss development trends, a decline in capitalisation, or eroding premium levels.