A.M. Best Affirms Ratings of Berkshire Hathaway Inc.’s Subsidiaries
September 01 2015 - 4:05PM
Business Wire
A.M. Best has affirmed the financial strength rating
(FSR) of A++ (Superior) and the issuer credit ratings (ICR) of
“aaa” of National Indemnity Company (National Indemnity)
(Omaha, NE) and its affiliates. Concurrently, A.M. Best has
affirmed the FSR of A- (Excellent) and the ICR of “a-” of Finial
Reinsurance Company (Stamford, CT), as well as the ICR of
“bbb-” and the issue rating of “bbb-” of Finial Holdings
Inc. (Delaware). A.M. Best also has affirmed the FSR of A++
(Superior) and the ICR of “aa+” of Berkshire Hathaway Life
Insurance Company of Nebraska (BHLN) and the FSR of A+
(Superior) and the ICR of “aa-” of First Berkshire Hathaway Life
Insurance Company (FBHL) (New York, NY). These companies are
all subsidiaries of Berkshire Hathaway Inc. (Berkshire)
[NYSE: BRK A and BRK B]. The outlook for all ratings is stable. All
companies are headquartered in Omaha, NE, unless otherwise
specified. (See below for a detailed listing of the companies and
ratings.)
The affirmation for the ratings of National Indemnity reflects
its consistently superior operating performance, historically
strong risk-adjusted capitalization and global market profile.
National Indemnity’s management team continues to be adept at
dealing with the underwriting cycle and has the financial resources
and acumen necessary to take advantage of unique opportunities.
A.M. Best believes that this distinctive aspect and its superior
market profile provide National Indemnity with the ability to
outperform the market in terms of underwriting performance.
National Indemnity’s operating performance is enhanced by the
investment returns generated by the strategies of the chief
executive officer (CEO) of its parent Berkshire, Mr. Warren
Buffett, whose investment expertise is heavily relied upon to
bolster the total returns of the organization.
National Indemnity’s risk-based capitalization remains
consistently at the superior level. Historically, the company has
managed its aggregate risk accumulations conservatively, and as a
result, its risk-based capitalization has continued to remain in
the superior range.
Partially offsetting these strengths is National Indemnity’s
exposure to higher levels of equity investments as compared with
most of its peers. These higher levels of equity investments can
result in volatile results; however, A.M. Best’s concern is
somewhat mitigated by National Indemnity’s investment portfolio’s
superior long-term performance.
The importance of Mr. Buffett (as CEO) to the entire Berkshire
organization and the lack of transparency with regard to his
successor continue to pose a concern for A.M. Best. Although A.M.
Best believes there are very strong internal candidates to succeed
Mr. Buffett, the lack of clarity in regards to a chosen successor
adds a degree of uncertainty to the future direction of the
corporation, as Mr. Buffett personally controls the capital
allocation within the firm. Nevertheless, A.M. Best believes
Berkshire’s corporate strategy, culture and decentralized operating
structure will facilitate a successful transition in management
when it occurs.
The ratings of BHLN recognize its adequate level of
risk-adjusted capitalization, steady flow of transaction activity
and the implicit and explicit benefits of being part of the
Berkshire organization. Partially offsetting these positive rating
factors are BHLN’s fluctuating statutory operating trends driven by
the deal flow and mortality results on certain blocks, increased
exposure to interest sensitive business and its heavy concentration
in affiliated non-insurance investments.
National Indemnity’s ratings could experience negative rating
actions if large catastrophic losses in combination with large
investment losses decrease its risk-based capitalization below the
expectations of A.M. Best or the company experiences a series of
operating losses over several years that exceed A.M. Best’s
expectations.
The FSR of A++ (Superior) and the ICRs of “aaa” have been
affirmed for National Indemnity Company and its following
affiliates:
- Columbia Insurance Company
- National Fire & Marine Insurance
Company
- National Liability & Fire
Insurance Company
- National Indemnity Company of
Mid-America
- National Indemnity Company of the
South
- Berkshire Hathaway Specialty
Insurance Company
The following issue rating has been affirmed:
Finial Holdings, Inc.—
-- “bbb-” on $200 million 7.125% senior unsecured notes, due
2023
This press release relates to rating(s) 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 visit A.M.
Best’s Ratings & Criteria Center.
A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright © 2015 by A.M. Best Company,
Inc. ALL RIGHTS RESERVED.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150901006652/en/
A.M. BestPeter Dickey, 908-439-2200, ext.
5053Assistant Vice President
–P/Cpeter.dickey@ambest.comorChristopher Sharkey,
908-439-2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorSteve Vincent,
908-439-2200, ext. 5802Senior Financial Analyst
–L/Hsteve.vincent@ambest.comorJim Peavy,
908-439-2200, ext. 5644Assistant Vice President, Public
Relationsjames.peavy@ambest.com
Berkshire Hathaway (NYSE:BRKA)
Historical Stock Chart
From Mar 2024 to Apr 2024
Berkshire Hathaway (NYSE:BRKA)
Historical Stock Chart
From Apr 2023 to Apr 2024