AM Best has affirmed the Financial Strength Rating (FSR) of A++ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa+” (Superior) of the property/casualty (P/C) members of Houston Casualty Group. The lead P/C members are headquartered in Houston, TX, except for HCC Reinsurance Company Limited (Hamilton, Bermuda). AM Best also has affirmed the FSR of A++ (Superior) and the Long-Term ICR of “aa+” (Superior) of HCC Life Insurance Company (HCC Life) (Indianapolis, IN). The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed list of the P/C companies.)

The ratings of the P/C members of the group reflect their consolidated balance sheet strength, which AM Best assesses as strongest, as well as their strong operating performance, favorable business profile and the very strong enterprise risk management (ERM) of the consolidated operations.

The P/C companies continue to record strong operating performance across extended time periods and multiple underwriting cycles. The consistency in the group’s underwriting results is driven by enhanced pricing sophistication and risk optimization and continues to be bolstered by solid and consistent investment returns. Proactive management of the group’s capital level includes retaining earnings to provide balance sheet capacity for the risk profile and appetite and allows for sizeable dividend payments. The ratings also recognize the group’s position as a specialty market leader that is considerably well-diversified by product, jurisdiction and distribution. The ratings also consider the operational, financial, and ERM support provided by Tokio Marine & Nichido Fire Insurance Co., Ltd., which is the lead insurance operating company in the Tokio Marine Holdings, Inc. organization. This support includes day-to-day operational synergies across its U.S.-based subsidiaries, reinsurance support and economic capital modeling that is superior to peer companies.

The ratings of HCC Life reflect its balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and very strong ERM. The ratings also reflect the rating enhancement it receives from its affiliation with Houston Casualty Group.

HCC Life continues to maintain the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). HCC Life’s disciplined underwriting approach and ongoing expense management have resulted in favorable earnings over recent periods. HCC Life contributes a significant portion of Houston Casualty Group’s overall premium and earnings with a dominant position in the medical stop-loss insurance marketplace. Partially offsetting these positive rating factors is HCC Life’s significant concentration in the medical stop-loss line of business.

The FSR of A++ (Superior) and the Long-Term ICRs of “aa+” (Superior) have been affirmed with stable outlooks for the following members of the Houston Casualty Group:

• Houston Casualty Company
• Avemco Insurance Company
• U.S. Specialty Insurance Company
• HCC Reinsurance Company Limited
• American Contractors Indemnity Company
• United States Surety Company
• Producers Agriculture Insurance Company
• Producers Lloyds Insurance Company

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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