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FOR IMMEDIATE RELEASE
LONDON - FEBRUARY 06, 2015 09:09 AM (EST)
A.M. Best has affirmed the financial strength rating of A++ (Superior) and the issuer credit rating of "aa+" of HSB Engineering Insurance Limited (HSBEIL) (United Kingdom). The outlook for both ratings remains stable.
The ratings of HSBEIL reflect its excellent risk-adjusted capitalisation, track record of strong underwriting performance and established business profile as a specialist insurer of engineering risks in the United Kingdom and Canada. The ratings also reflect HSBEIL's strategic importance to its parent, The Hartford Steam Boiler Inspection and Insurance Company (HSBIIC), a member of The Hartford Steam Boiler Group (HSB), as its principal source of international diversification.
HSBEIL's risk-adjusted capitalisation remains at an excellent level. The company has a track record of strong underwriting performance, evidenced by a five-year average combined ratio of 81.2% (2009 – 2013). HSBEIL's technical performance has also remained strong during the first nine months of 2014. HSBEIL reported an excellent pre-tax profit of GBP 14.0 million in 2013. The profit was lower than in 2012 (GBP 23.3 million), primarily due to an increase in unrealised losses from the company's investment portfolio, composed largely of government and corporate bonds.
The company has an established specialist business profile in the United Kingdom and Canada as an underwriter of niche engineering risks including equipment breakdown, property damage and business interruption insurance. HSBEIL's Canadian business is written through its wholly owned subsidiary, The Boiler Inspection and Insurance Company of Canada. HSBEIL's profile also benefits from its wholly-owned subsidiary, HSB Engineering Insurance Services Limited, which provides engineering inspection services to HSBEIL's clients.
A change in HSBIIC's ratings is likely to lead to a change in HSBEIL's ratings. In addition, negative rating actions could occur if HSBEIL's risk-adjusted capitalisation deteriorates significantly or if the company's strategic importance to HSB diminishes.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilised:
In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.
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.