AM Best has affirmed the credit ratings of Bermudian-based Hiscox Ltd and its subsidiaries.

The agency affirmed the financial strength rating of A (Excellent) and the long-term issuer credit ratings of “a+” (Excellent) of Hiscox Insurance Company (Bermuda) Ltd; Hiscox Insurance Company Ltd of Britain; Hiscox Insurance Company (Guernsey) Ltd; and Hiscox Insurance Company Inc of Chicago, Illinois.

At the same time, AM Best has affirmed the long-term ICR of “bbb+” (Good) of Hiscox Ltd, the ultimate non-operating holding company of the Hiscox group of companies.

The outlook of these credit ratings is stable.

The ratings of Hiscox reflect the group’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

AM Best said the ratings of HIB, HICL, HIG and HICI reflected their strategic importance to Hiscox, as well as their integration within the group.

The agency said the Hiscox group was an international insurer and reinsurer with good brand strength and a diversified book of business. The group has a strong presence in the Lloyd’s market, primarily through Lloyd’s Syndicate 33, which is one of the largest Lloyd’s syndicates based on 2023 gross written premium.

It said: “The Hiscox group’s balance sheet strength is underpinned by consolidated risk-adjusted capitalisation at the strongest level, as measured by Best’s capital adequacy ratio.

“The balance sheet strength assessment also considers the group’s good financial flexibility and strong liquidity profile. The group has a prudent reserving strategy, demonstrated by a history of positive overall reserve development.”

AM Best added: “Hiscox has a track record of strong underwriting performance across the cycle, supported by a geographically diverse earnings profile.

“Ongoing underwriting portfolio management has supported improved technical performance in recent years. In 2023, Hiscox reported a combined ratio (net/net) of 87.7 per cent, representing a 1.8 percentage point improvement compared with 2022, as calculated by AM Best on an IFRS-17 basis.

“AM Best expects the group’s performance to remain strong over the short to medium term, supported by favourable market conditions in the majority of Hiscox’s lines of business and moderate investment returns.”