AM Best Affirms Credit Ratings Of Harrington Re
AM Best has affirmed the Financial Strength Rating of A- [Excellent] and the Long-Term Issuer Credit Rating of “a-” [Excellent] for Harrington Re Ltd.
The ratings agency said, “AM Best has affirmed the Financial Strength Rating of A- [Excellent] and the Long-Term Issuer Credit Rating [Long-Term ICR] of “a-” [Excellent] of Harrington Re Ltd. [Harrington]. AM Best also has affirmed the Long-Term ICR of “bbb-” [Good] of Harrington Reinsurance Holdings Limited. Both companies are domiciled in Bermuda. The outlook of these Credit Ratings [ratings] is stable.
“The ratings reflect Harrington’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
“Harrington, which commenced operations in 2016, is sponsored by AXIS Capital Holdings Limited [AXIS] and The Blackstone Group Inc. Harrington’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio [BCAR], was consistent with a strongest level assessment. Prospectively, AM Best expects Harrington’s BCAR scores to remain supportive of an overall balance sheet strength assessment of very strong.
“The company employs an alternative asset strategy that has historically contributed to net income. Harrington continues to build out a diversified, multiline reinsurance book of business with a focus on medium to longer-tailed casualty lines. Currently, Harrington does not directly face the market and business is sourced through cessions from AXIS. Harrington has a developed risk management function and also benefits from expertise and systems from both its sponsors.
‘Negative rating action could occur if Harrington experiences significant adverse reserve development that impacts capitalization. Negative rating action could also occur if Harrington’s investment performance experiences significant downside volatility or if its risk-adjusted capitalization declines materially. Though unlikely in the near-term, positive rating action could occur from a long-term trend of favorable reserve development.”
