A.M. Best Affirms Credit Ratings of BNY Trade Insurance, Ltd. and The Hamilton Insurance Corp.
February 02 2017 - 11:47AM
Business Wire
A.M. Best has affirmed the Financial Strength Ratings of
A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term
ICR) of “a+” of BNY Trade Insurance, Ltd. (BNY Trade)
(Hamilton, Bermuda) and The Hamilton Insurance Corp.
(Hamilton) (Melville, NY). The outlook of these Credit Ratings
(ratings) is stable.
The ratings of BNY Trade and Hamilton reflect each company’s
strong risk-adjusted capitalization, consistently excellent
operating performance, solid liquidity and conservative operating
strategy.
Partially offsetting these positive rating factors are the
companies’ limited market scope, business profile and product mix,
as well as its dependence on third parties for processing,
servicing and administration. Furthermore, the companies’ maintain
relatively large (gross) underwriting exposure, as they offer
high-gross insurance limits and insure bankers’ professional
liabilities and excess all risk property with substantial insured
values.
Additionally, the ratings recognize BNY Trade’s and Hamilton’s
robust enterprise risk management (ERM) frameworks, as they follow
the ERM practices of their ultimate parent, The Bank of New York
Mellon Corporation (BNY Mellon) [NYSE:BK], a leading global
financial services company. The ratings also recognize the
companies’ excellent business position, as a result of their close
ties to BNY Mellon.
BNY Trade and Hamilton provide comprehensive reinsurance
coverage and products to their parent, BNY Mellon. BNY Trade and
Hamilton benefit from BNY Mellon’s significant financial resources,
as well as extensive risk mitigation and safety programs, which
have been implemented throughout the organization.
As the companies fully cede certain assumed risks to the
commercial market, their exposure to net underwriting losses is
minimal in these instances. Furthermore, the associated credit risk
is limited through the use of highly rated reinsurers. The
companies’ projected operating results indicate favorable returns,
and their aggregate surplus base of more than $1.4 billion is more
than adequate to support their asset and credit risk exposures.
While BNY Trade’s excess bankers’ professional program, and
Hamilton’s excess all-risk cash and securities and excess all risk
property coverages written offer significant insured values
(considering the high coverage limits offered), the net impact of a
full limit loss could strain the companies’ risk-adjusted
capitalization. Nonetheless, this is mitigated by the historical
fact that BNY Mellon has not experienced significant claims for
these coverages in the layers insured by BNY Trade and Hamilton.
Also, A.M. Best recognizes the low probability of such events, and
the companies’ prospective risk-adjusted capitalizations are likely
to remain strong, if these were to occur.
Negative rating actions could occur if there were a material
shift from its risk profiles that potentially could undermine the
stability of the ratings. Furthermore, negative rating actions
could occur if there were any material shifts in ownership,
strategy or significant changes in the company’s financial
condition caused by a large catastrophe. In addition, negative
rating actions could occur if there were financial issues resulting
in rating pressure on the parent company, or deterioration on its
credit profile could also impact the operating companies’
ratings.
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.
A.M. Best is the world’s oldest and most authoritative
insurance rating and information source. For more information,
visit www.ambest.com.
Copyright © 2017 by A.M. Best Rating
Services, Inc. and/or its subsidiaries. ALL RIGHTS
RESERVED.
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version on businesswire.com: http://www.businesswire.com/news/home/20170202005955/en/
A.M. BestStephen Ruane, +1 908 439 2200, ext.
5431Senior Financial
Analyststephen.ruane@ambest.comorGary Davis, +1 908
439 2200, ext.
5665Directorgary.davis@ambest.comorChristopher
Sharkey, +1 908 439 2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy,
+1 908 439 2200, ext. 5644Director, Public
Relationsjames.peavy@ambest.com
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