AM Best Affirms Credit Ratings of The Hartford Financial Services Group, Inc. and subsidiaries

AM Best has affirmed the Long Term Credit Rating (Long Term ICR) of “a-” (Excellent) and the Long Term Credit Rating (Long Term IR) of The Hartford Financial Services Group, Inc. (The Hartford Financial Services Group, Inc. Hartford) (Delaware) [NYSE: HIG], which is the main parent of the companies mentioned here. AM Best has reaffirmed the Financial Strength Rating (FSR) of A+ (Superior) and Past ICRs of “aa-” (Superior) for Hartford Life and Accident Insurance Company (Hartford, CT), Navigators Insurance Company (located in Harford, CT) , and Hartford Fire Insurance Company (Hartford, CT) and its subsidiaries and affiliates, collectively known as the Hartford Insurance Group. The loan format (parts) is fixed. (See below for information on corporations and Long Term IRSs.)

Hartford Insurance Group’s ratings reflect its strengths, which AM Best considers very strong, as well as its operational efficiency, sound business history and corporate governance (ERM).

The rating reflects Hartford Insurance Group’s capital adequacy ratio, which remains very strong, as measured by Best’s Capital Adequacy Ratio (BCAR). In addition, the group provides excellent cash flow reporting, strong financial metrics and is diversified and well-managed. The Hartford Insurance Group also benefits from The Hartford’s improved financial position, with access to capital markets as needed, and through its five-year, $750 million senior debt facility, which matures in October 2026. AM Best reports that Hartford Insurance Group also has access to additional income through its membership with the Federal Home Loan Bank of Boston. The group continues to have a comprehensive reinsurance policy with highly accredited reinsurers.

Hartford Insurance Group’s diversified portfolio and distribution capabilities are the driving force behind the group’s earnings and recently reported earnings. The group reported an increase in capital expenditure to increase cash flow, although its investments fell slightly due to higher interest rates and credit spreads. Like its peers, Hartford Insurance Group’s financials have been affected by pressures from inflationary conditions; In particular, car accident claims and home repair costs. Despite the challenges facing both companies, Hartford Insurance Group continues to report strong returns and double-digit returns. In addition, the group continues to benefit from its Hartford Next cost reduction program, which has significantly reduced annual operating expenses.

A good business analysis of the group reflects its recognized presence and strong market position in the property/casualty market as well as its leading position in the group benefits market. In addition, the group’s successful management team has been successful in implementing business strategies and initiatives that support its goal of long-term profitable growth. The Hartford Insurance Group continues to improve its risk management technology, which is deemed appropriate to support its financial, operational and risk-related insurance policies.

Hartford’s loan-to-value ratio and interest rate are within AM Best’s guidelines for its current ratings. AM Best expects Hartford to remain financially strong to support any needs of the companies it serves.

The FSR of A+ (Superior) and Prior ICRs of “aa-” (Superior) have been determined by the firm’s opinion of the following entities of The Hartford Financial Services Group, Inc.:

  • Hartford Fire Insurance Company
  • Hartford Accident and Indemnity Company
  • Hartford Insurance Company of Illinois
  • Hartford Casualty Insurance Company
  • Hartford Underwriters Insurance Company
  • Pacific Insurance Company Limited
  • Twin City Fire Insurance Company
  • Nutmeg Insurance Company
  • Hartford Insurance Company of the Midwest
  • Hartford Insurance Company of the Southeast
  • Hartford Life and Accident Insurance Company
  • Property and Casualty Insurance Company of Hartford
  • Trumbull Insurance Company
  • Sentinel Insurance Company, Ltd.
  • Hartford Lloyd’s Insurance Company
  • Navigators Insurance Company
  • Navigators Specialty Insurance Company
  • Maxum Indemnity Company
  • Maxum Casualty Insurance Company

The following Long-Term IRs have been determined with a fixed point of view:

Hartford Financial Services Group, Inc.
– “a-” (Good) on $600 million 2.8% senior unsecured notes, due 2029
– “a-” (Good) on $300 million 5.95% senior unsecured notes, due 2036
– “a-” (Excellent) for $300 million 6.625% senior unsecured notes, due 2040 (approximately $295 million)
– “a-” (Excellent) on $409 million 6.1% senior unsecured notes, due 2041
– “a-” (Good) for $425 million 6.625% senior unsecured notes, due 2042 (approximately $178 million)
– “a-” (Excellent) on $300 million 4.3% senior unsecured notes, due 2043
– “a-” (Good) on $500 million 4.4% senior unsecured notes, due 2048
– “a-” (Good) on $800 million 3.6% senior unsecured notes, due 2049
– “a-” (Good) on $600 million 2.9% senior unsecured notes, due 2051
– “bbb” (Good) on $500 million floating rate junior bonds, due 2067
– “bbb” (Good) at $345 million 6% which does not add interest

The following Long-Term IRs for securities available under the shelf register have been determined by default:

Hartford Financial Services Group, Inc.
– “a-” (Good) on an unsecured principal
– “bbb+” (Good) on the main guides
– “bbb” (Good) for junior subordinate
– “bbb” (Good) for your favorite settings

Source: AM Best