Best Affirms Ratings of Hartford Steam Boiler Group’s Members

A.M. Best Co. has affirmed the financial strength rating (FSR) of ‘A++’ (Superior) and the issuer credit ratings (ICR) of “aa+” of the members of The Hartford Steam Boiler Group (HSB).

In addition A.M. Best Europe – Rating Services Limited has affirmed the FSR of ‘A++’ (Superior) and ICR of “aa+” of HSB’s U.K.-domiciled member, HSB Engineering Insurance Limited.

The outlook for all ratings is stable.

The ratings recognize HSB’s “distinctive niche business profile, excellent risk-adjusted capitalization, strong underwriting performance and reserving history,” Best explained. “HSB is a leading provider of boiler and machinery, specialty engineering insurance and machinery inspection services, and it continues to maintain this position with superior loss control capacity, technical expertise and a unique industry database.”

Best also indicated that the rating affirmations “reflect the group’s synergies with Munich Reinsurance America, Inc. and its ultimate parent, Munich Reinsurance Company (Munich Re).

The report noted that “HSB’s relationship with Munich Re has begun to provide access to new markets in continental Europe as well as providing new business opportunities. In addition, HSB is leveraging its engineering workforce within the Munich Re organization. Furthermore, HSB’s already robust enterprise risk management (ERM) practices receive additional benefits from Munich Re’s extensive ERM resources.

“HSB has continued its long history of consistently exceptional performance and sustainable, strong capitalization while also regularly producing strong return measures. Management has been very successful in managing through underwriting cycles and has the expertise and resources to take advantage of underwriting opportunities as well as developing and introducing new specialty products, such as, data compromise, identity recovery and other specialty products.”

Best said it “believes that HSB is well positioned at its current rating level. However, positive rating actions could occur if there was upward rating movement at the ultimate parent level. Rating drivers that may lead to negative rating actions include a sustained, material deterioration in HSB’s operating performance or substantial deterioration in its risk-adjusted capitalization as measured by Best’s Capital Adequacy Ratio (BCAR).”

Best summarized the companies included it its ratings affirmation as follows:
The FSR of ‘A++’ (Superior) and the ICRs of “aa+” have been affirmed for the following members of The Hartford Steam Boiler Group:
The Hartford Steam Boiler Inspection and Insurance Company
The Hartford Steam Boiler Inspection and Insurance Company of Connecticut
The Boiler Inspection and Insurance Company of Canada
HSB Specialty Insurance Company
HSB Engineering Insurance Limited

Source: A.M. Best