OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has upgraded the Financial Strength Rating to B++ (Good) from B+ (Good) and the Long-Term Issuer Credit Rating to “bbb” from “bbb-” of Hanover Fire & Casualty Insurance Company (HFCIC) (King of Prussia, PA). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.
These Credit Ratings (ratings) reflect HFCIC’s balance sheet strength, which AM Best categorizes as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
The ratings upgrade reflects sustained improvement to HFCIC’s balance sheet strength, reflective of the strongest level of risk-adjusted capitalization and organic surplus growth over the past five years. Additionally, the company’s adequate balance sheet strength reflects the overall solid liquidity measures that are enhanced by positive underwriting and operating cash flows, and its fairly conservative investment portfolio. However, partially offsetting the positive factors is the company’s elevated underwriting leverage, which compares unfavorably with the personal property composite average; this was primarily driven by the company’s premium growth outpacing its surplus growth over the past five years. Despite this, management has displayed its commitment to HFCIC by paying off the holding company debt at Hanover Fire Holdings, Inc., which has decreased 47% in the past two years.
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