OLDWICK, N.J.--(BUSINESS WIRE)--
A.M. Best Co. has affirmed the financial strength rating of B++ (Good) and the issuer credit ratings of “bbb+” of Household Life Insurance Company (Household Life) (Detroit, MI) its direct subsidiary, First Central National Life Insurance Company of New York (First Central) (New York, NY), and its property/casualty affiliate, HSBC Insurance Company of Delaware (HSBC DE) (New Castle, DE). The outlook for all ratings is stable. Concurrently, A.M. Best has withdrawn the ratings of all three companies in response to management’s request to no longer participate in A.M. Best’s interactive rating process.
On March 31, 2013, Enstar Group Limited (Enstar) (ESGR) (Bermuda) completed the acquisition of the U.S. and Canadian closed-life insurance operations from HSBC Holdings plc. Enstar specializes in acquiring and managing insurance and reinsurance companies in run off.
The ratings of Household Life and First Central reflect their adequate risk-adjusted capitalization despite large stockholder dividends in recent periods and historically favorable operating results, particularly within their core credit life and accident and health lines of business. A.M. Best notes that Household Life reported substantial operating losses in 2012 due mainly to costs associated with exiting its term insurance business as well as reserve increases in this product line.
The ratings of HSBC DE recognize its sound risk-adjusted capitalization and historically strong underwriting and operating performance. In March 2013, HSBC DE received a capital contribution from its former parent that increased policyholders’ surplus from $2.1 million at year-end 2012 to over $10 million as of March 31, 2013.
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. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
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 © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
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Michael Adams—L/H, 908-439-2200, ext. 5133
Senior Financial Analyst
Robert Valenta—P/C, 908-439-2200, ext. 5291
Senior Financial Analyst
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations