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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - JULY 20, 2007 12:00 AM (EDT)
A.M. Best Co. has assigned a financial strength rating (FSR) of A (Excellent) and an issuer credit rating (ICR) of "a" to Hawaii Employers' Mutual Insurance Company, Inc. (HEMIC) (Honolulu, HI). The outlook for both ratings is stable.
The ratings reflect HEMIC's superior risk-adjusted capitalization, outstanding profitability, conservative operating strategies and dominant market position in the Hawaii workers' compensation market. HEMIC's operating strategy is focused on bottom line profitability that enables the company to adjust throughout underwriting cycles by being capable of handling large revenue fluctuations due to changing market conditions. This strategy has proven to be effective as evidenced by HEMIC's conservative leverage position, prudent reserving practices and investment philosophy and solid reinsurance program. Slightly offsetting these positive rating factors is the concentration risk as a single state, mono-line workers' compensation insurer. Nevertheless, the rating outlook reflects the expectation that future operating performance and capitalization will continue to support the ratings at their current levels.
The ratings also recognize the inherent competitive platform of HEMIC including its exemption from federal income taxes, the significant rate flexibility afforded by the company's five rating tiers and autonomy of the surcharge eligibility definition. The ratings also reflect the technology utilized by HEMIC to support its operations, which affords management real time access to market intelligence through its data warehouse. Furthermore, the ratings recognize the organization's ability to change through both hard and soft market cycles.
For Best's Ratings, an overview of the rating process and rating methodologies, please visit Best's Rating Center.
Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. For more information, visit www.ambest.com.