Rating agency A.M. Best changed the outlook associated with the “A” financial strength rating of the members of the Hartford Insurance Pool to positive from stable Thursday, citing a reduced risk from variable annuity business to explain the change.
Best also affirmed and changed the outlook on the “a+” issuer credit ratings (ICRs) of these companies—Hartford Fire Insurance Company and its pooling subsidiaries and affiliates—as well as the “bbb+” ICR and all the debt ratings of the parent company, The Hartford Financial Services Group, Inc.
Best said the outlook changes reflect the rating agency’s expectation The Hartford will generate solid earnings over the near term while maintaining the group’s strong risk-adjusted capital position and continuing to pay dividends to support its parent’s obligations. Best citied the depth and scope of Hartford’s operations, generally conservative underwriting practices and effective utilization of multiple distribution channels as factors supporting this expectation.
Best said the ratings affirmations reflect the Pool’s solid risk-adjusted capitalization, improving underwriting and operating profitability and excellent market position within the property/casualty industry.
Although the pool’s results aren’t up to historical levels, and they have been impacted by catastrophes and non-cat weather losses, the results remain better than the average of peers in recent years, according to Best. Management remains focused primarily on less volatile small-to-middle commercial markets and personal lines, the rating agency added in the announcement.
Source: A.M. Best