A.M. Best Revises Outlook for The Hartford

A.M. Best Co. has revised the outlook to stable from negative and affirmed the issuer credit rating (ICR) of “bbb+” of The Hartford Financial Services Group, Inc.

A.M. Best also has affirmed the financial strength ratings (FSR) of A (Excellent) and ICRs of “a+” of the key property/casualty insurance subsidiaries of The Hartford (known as the Hartford Insurance Pool). The outlook for these ratings is stable.

Additionally, A.M. Best has affirmed the FSR of A (Excellent) and ICRs of “a+” of the key life/health insurance subsidiaries of The Hartford. The outlook for the ICRs has been revised to stable from negative, while the outlook for the FSRs is stable.

According to the rating analyst, The Hartford’s ratings and outlook reflect the financial strength and creditworthiness of its main property/casualty and life operating companies as well as the numerous steps the organization has taken to improve capital and liquidity in recent years, including the repayment of $3.4 billion of fixed rate cumulative perpetual preferred stock to the U.S. Department of the Treasury on March 31, 2010.

In addition, A.M. Best said, The Hartford maintains a sizeable amount of cash and short-term securities at the holding company level, totaling $2.1 billion at year-end 2010, and has access to a $1.9 billion credit facility.

A.M. Best said its ratings of the Hartford Insurance Pool acknowledge its “solid risk-adjusted capitalization, strong underwriting fundamentals, continued core operating profitability and excellent business position within the property/casualty industry.”

These strengths, in A.M. Best’s view, are somewhat offset by the Hartford Insurance Pool’s “above-average exposure” to asset classes related to commercial real estate in comparison to the overall property/casualty industry, and continued soft market conditions throughout most commercial lines.

Nevertheless, its outlook reflects A.M. Best’s view that the Hartford Insurance Pool is “well positioned to manage challenging property/casualty market dynamics such as pricing pressures and increased competition.”

A.M. Best said its ratings of Hartford Life recognize improvements in its operating results, capitalization levels and investment portfolio. In 2010, Hartford Life’s operating results improved across most of its segments; the group continues to maintain a strong position in several U.S. life and retirement savings businesses, A.M. Best said.