Hamilton Re ratings upgraded – what’s behind the push?

Following positive developments in its investment and underwriting results, Hamilton Re has received upgraded ratings from AM Best.

The credit agency has increased the financial strength rating of the Bermuda-based reinsurer, as well as Hamilton Insurance Designated Activity Company to A (Excellent) from A- (Excellent) and has elevated the long-term issuer credit ratings to “a” from “a-“ for these entities.

Both companies are wholly owned subsidiaries of Hamilton Insurance Group. Additionally, the outlook for these ratings has been shifted to stable from positive.

AM Best notes that this upgrade reflects the robustness of Hamilton’s financial foundation, its satisfactory operational achievements, its neutral business stance, and its suitable approach to enterprise risk management.

The company’s operating performance, categorized as adequate, has been supported by positive historical investment outcomes and underwriting profits, particularly noted in 2023. This is a result of broadening underwriting efforts, benefiting from favorable market rates, business reunderwriting, and integrating the Pembroke Managing Agency platform acquired in 2019 at Lloyd’s.

The improvement in the Long-Term ICRs can also be attributed to a trend of progressively favorable underwriting outcomes at Hamilton, which has fostered organic capital growth and enhanced financial stability.

Over the past five years, the company has displayed consistent underwriting improvement and has maintained reserves conservatively, with a record of net favorable reserve development that surpasses that of its competitors.

A strong balance sheet assessment also factors in Hamilton’s prudent reserve practices and its aggressive investment strategy, particularly with investments managed by Two Sigma Investments, LP.

The neutral business profile assessment stems from Hamilton’s ongoing expansion of its global insurance and reinsurance operations. The company’s risk management practices are deemed appropriate for its risk profile.

“We are thrilled that AM Best has upgraded Hamilton to an ‘A’ rating,” CEO Pina Albo said. “This endorsement recognizes the remarkable business transformation that our team has achieved over the past five years. It also allows us to continue expanding our access to profitable business at this favorable time in the market cycle, thus facilitating the execution of our strategy of building a global specialty insurance and reinsurance company.”

“Receiving an ‘A’ rating from AM Best is a meaningful acknowledgment of the dedication and hard work of our team. Taken together with our recent listing as a public company and our ten-year anniversary, our ratings upgrade completes a trilogy of success to be celebrated,” Albo said.

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