Best Affirms First Hawaii ‘A’ Ratings
A.M. Best Co. has affirmed the financial strength rating (FSR) of ‘A’ (Excellent) and issuer credit ratings (ICR) of “a” of First of Hawaii Group and its members. The outlook for all ratings is stable. (See below for a detailed listing of the companies and ratings.)
“The ratings reflect the group’s very strong risk-adjusted capitalization, strong overall earnings profile and sound localized market presence as a leading insurance provider in Hawaii,” said Best. “The group’s strengths are derived from its local brand name recognition, well-established agency relationships, local market expertise and diverse product portfolio. The group also benefits from the operational and financial support of its ultimate owners, CNA Financial Corporation (Chicago, IL) (NYSE: CNA) and Tokio Marine & Nichido Fire Insurance Co. Ltd. (Japan).”
However, Best noted that “the group’s concentration risk as a single state insurer and its potential exposure to catastrophe losses” should be considered as offsetting factors.
“Consequently, the group’s gross catastrophe exposure to a 100 year hurricane, as depicted in a probable maximum loss (PML), is greater than its statutory surplus,” Best observed. “However, management has taken an active role in monitoring its catastrophe exposure and mitigating this risk through disciplined underwriting and extensive reinsurance protection.
“As a result, the group’s net catastrophe exposure is reduced to a manageable level. In addition, in 2008 through its recent partnership with Argo Group US, Inc. to provide hurricane coverage to the majority of its existing personal lines insureds, the group expects its gross hurricane exposure to decline significantly through 2009.
The FSR of A (Excellent) and ICRs of “a” have been affirmed for First of Hawaii Group and its following members:
First Fire and Casualty Insurance of Hawaii, Inc.
First Indemnity Insurance of Hawaii, Inc.
First Insurance Company of Hawaii, Ltd.
First Security Insurance of Hawaii, Inc.
Source: A.M. Best – www.ambest.com
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