AM Best Reaffirms Superior Credit Ratings for Houston Casualty Group and Affiliates
AM Best has reaffirmed the Financial Strength Rating (FSR) of A++ (Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “aa+” (Superior) for the property/casualty (P/C) members of Houston Casualty Group. Most of the lead P/C members are headquartered in Houston, Texas, except HCC Reinsurance Company Limited, based in Hamilton, Bermuda. Additionally, the FSR of A++ (Superior) and Long-Term ICR of “aa+” (Superior) for HCC Life Insurance Company (HCC Life), located in Indianapolis, Indiana, have also been reaffirmed. The outlook for all ratings remains stable. (Refer below for a detailed list of P/C companies.)
The ratings for the P/C members reflect their robust consolidated balance sheet strength, which AM Best assesses as the strongest, alongside strong operating performance, a favorable business profile, and exceptional enterprise risk management (ERM) across their consolidated operations.
The group has consistently achieved strong operating performance across various market cycles, driven by advanced pricing strategies, risk optimization, and consistent investment returns. Effective capital management, including the retention of earnings, enhances balance sheet capacity while supporting significant dividend payments. The ratings also recognize the group’s status as a market leader in specialty insurance, with extensive diversification by product, jurisdiction, and distribution channels. Furthermore, the ratings take into account operational, financial, and ERM support from Tokio Marine & Nichido Fire Insurance Co., Ltd., the leading insurance entity within Tokio Marine Holdings, Inc. This support includes operational synergies across U.S. subsidiaries, reinsurance backing, and superior economic capital modeling.
HCC Life’s ratings reflect its robust balance sheet, strong operating performance, stable business profile, and superior ERM. The company’s affiliation with Houston Casualty Group also provides a rating enhancement.
HCC Life maintains the strongest level of risk-adjusted capitalization, as indicated by Best’s Capital Adequacy Ratio (BCAR). Its disciplined underwriting and efficient expense management have driven favorable earnings. HCC Life plays a significant role in contributing to the overall premium and earnings of Houston Casualty Group, particularly within the medical stop-loss insurance sector. However, its concentration in the medical stop-loss line of business is noted as a limiting factor.
The following Houston Casualty Group members have had their FSR of A++ (Superior) and Long-Term ICRs of “aa+” (Superior) reaffirmed, with stable outlooks:
- Houston Casualty Company
- Avemco Insurance Company
- U.S. Specialty Insurance Company
- HCC Reinsurance Company Limited
- American Contractors Indemnity Company
- United States Surety Company
- Producers Agriculture Insurance Company
- Producers Lloyds Insurance Company
