KBRA has affirmed the BBB+ issuer rating of Hamilton Insurance Group, Ltd., a Bermuda-based company, and the A insurance financial strength rating of Hamilton Re, Ltd, Hamilton Group’s lead operating company.
The outlook for these ratings has been changed from stable to positive.
In a report released by KBRA, it states that the Positive outlook reflects both firms’ continued improvement in the attritional loss ratio, with Hamilton Re in 2021 reporting an attritional loss ratio of 48.9%, 17.0 points improved over 2020 and 38.6 points better than 2017.
In addition, KBRA highlights that Hamilton Group maintains an unsecured term loan and has access to a revolver facility, noting that the group also sources cost-effective third-party capital through Ada Re and Easton Re to support its reinsurance/retrocessional program.
At the same time, KBRA believes that management actions taken on underperforming business, broader earnings diversification, and an improved pricing environment has driven the turnaround in underwriting results.
KBRA said: “Hamilton Group has a comprehensive, integrated enterprise risk management framework across the organization, with dedicated chief risk officers at each level who are supported by staff with a broad range of skill sets.
“Hamilton Group’s proprietary Hamilton Analytics and Risk Platform (HARP) provides a single view of the portfolio across the organization that allows for the construction and management of optimal portfolios and net positions across various stages of the underwriting and investment cycles.”
Furthermore, the report address that as a specialty insurer and reinsurer, Hamilton Group has exposure to the ongoing Ukraine/Russia conflict, with political violence, political risk, war and terror, and aviation being the most likely lines/businesses to be impacted from it.
However, KBRA notes that subject to coverage interpretations, Hamilton Group has significant amounts of reinsurance and retrocessional covers that may mitigate any eventual losses, and has taken a significant reserve charge in Q1 2022, therefore KBRA states that it views this proactive approach to reserving favorably.
Meanwhile, it was recently reported that Hamilton Re and Hamilton Insurance Designated Activity Company (Dublin, Ireland), had seen their outlooks revised to positive from stable by ratings agency, AM Best.
