OLDWICK, N.J.--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” of Hamilton Re, Ltd. (Hamilton Re) (Bermuda), Hamilton Specialty Insurance Company (HSIC) (Wilmington, Delaware) and Hamilton Insurance Company (HIC) (Wilmington, Delaware). The outlook of these Credit Ratings (ratings) is stable.
The ratings of Hamilton Re are based on its strong risk-adjusted capitalization, the continued successful implementation of its business plan, acceptance in the marketplace and positive operating results stemming from both underwriting results and the performance of its investment portfolio. The ratings also consider Hamilton Re’s experienced management team with its proven track record and the solid enterprise risk management that is in place. The ratings of HSIC and HIC consider the aforementioned attributes, as well as implicit and explicit support from Hamilton Re.
Partially offsetting these positive rating factors are the start-up nature of the company and the greater investment risk associated with its alternative investment strategy, as well as the continued competition and abundant capacity in the reinsurance marketplace. Also of concern is the relatively high gross investment leverage used by its investment manager, Two Sigma Investments (TSI). These risks could have an adverse effect on the company’s risk-adjusted capital. However, these risks are mitigated by Hamilton’s low underwriting leverage and experienced underwriting team. The investment leverage concerns are mitigated by the partially hedged nature of the portfolio, the large number of diversified liquid investments and TSI’s lengthy investment track record, which includes substantial positive investment results through the recent market volatility.
This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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