|[November 15, 2012]
A.M. Best Affirms Ratings of Harmony General Insurance Company Ltd.
OLDWICK, N.J. --(Business Wire)--
A.M. Best Co. has affirmed the financial strength rating of B+
(Good) and issuer credit rating of "bbb-" of Harmony
General Insurance Company Ltd. (Harmony) (Barbados). The outlook for
both ratings is stable.
The ratings reflect Harmony's solid risk-adjusted capitalization,
overall earnings in recent years and conservative reinsurance program.
Harmony is owned by ABH Holdings Ltd., a privately owned,
Barbados-domiciled holding company.
Harmony has reported overall earnings in recent years, which has enabled
it to enhance its capitalization through retention of earnings. Harmony
continues to maintain solid risk-adjusted capitalization for its current
business profile. Although the company operates in a region that has
historically been less prone to catastrophic events, Harmony maintains a
very conservative reinsurance program to limit its exposure to natural
Partially offsetting these positive rating factors is the geographic
concentration of Harmony's business in an increasingly competitive
domestic market, its reliance on reinsurance as a catastrophe risk
mitigation strategy and its limited financial flexibility as a result of
its private ownership structure.
While the outlook is stable, factors that could contribute to rating
enhancement include consistent improvement in Harmony's underwriting
performance, overall profitability and an upgrade in the Barbados
country risk tier rating.
Factors that may lead to negative rating actions include a sustained
decline in the company's underwriting profitability, significant
deterioration in its risk-adjusted capitalization as measured by Best's
Capital Adequacy Ratio (BCAR) and a downgrade in the Barbados country
risk tier rating.
The methodology used in determining these ratings is Best's Credit
Rating Methodology, which provides a
comprehensive explanation of A.M. Best's rating process and contains the
different rating criteria employed in the rating process. Key criteria
utilized include: "Risk Management and the Rating Process for Insurance
Companies"; "Understanding BCAR for Property/Casualty Insurers";
"Understanding Universal BCAR"; "Catastrophe Analysis in A.M. Best
Ratings"; and "Assessing Country Risk." Best's Credit Methodology can be
found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS
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