OLDWICK, N.J.--()--A.M. Best Co. has upgraded the financial strength rating (FSR) to A+ (Superior) from A (Excellent) and issuer credit ratings (ICR) to “aa-” from “a+” of First Insurance Company of Hawaii, Ltd. (FICOH) (Honolulu, HI) and its reinsured subsidiaries, collectively referred to as First of Hawaii Group. The outlook for the FSR remains stable, while the outlook for the ICR was revised to positive from stable.
On November 29, 2011, Tokio Marine Holdings, Inc. (TMHD) (Tokyo, Japan) acquired through its wholly owned subsidiary, Tokio Marine & Nichido Fire Insurance Co., Ltd. (TMNF) (Tokyo, Japan), 50% of the outstanding shares of FICOH, which previously was owned by CNA Financial Corporation (headquartered in Chicago, IL). As a result, FICOH became a wholly owned subsidiary of TMNF. On November 30, 2012, TMNF contributed 100% of the outstanding shares of FICOH to Tokio Marine North America Inc., an insurance holding company domiciled in the State of Delaware and a wholly owned direct subsidiary of TMNF. (See below for a detailed list of the companies and ratings.)
The ratings reflect First of Hawaii Group's excellent earnings profile through 2012, its unique role within TMHD and its 100% ownership by TMNF since late 2011. These ratings recognize FICOH’s consistently profitable underwriting performance, conservative reserving, strong risk-adjusted capitalization and sound localized market presence as one of the leading insurance providers in Hawaii. The ratings also consider the operational and financial support provided by TMNF.
Partially offsetting these positive rating factors are the group's concentration risk as a single state insurer, its potential exposure to catastrophe and terrorism losses and the existing weak economic conditions and highly competitive environment in its marketplace. Nevertheless, the outlook reflects the group's strong risk-adjusted capitalization and A.M. Best's expectation of continued profitable operating results in the near term.
Potential upward movement in the ratings of First of Hawaii Group could result from continued profitable underwriting performance and maintaining a strong risk-adjusted capital position. Possible downward movement in the ratings could result from a significant decline in operating performance and capitalization, any negative rating actions taken on TMNF and/or any change in support or relationship with TMHD.
The FSR has been upgraded to A+ (Superior) from A (Excellent) and the ICR to “aa-” from “a+” for the following members of First of Hawaii Group:
- First Insurance Company of Hawaii, Ltd.
- First Fire and Casualty Insurance of Hawaii, Inc.
- First Indemnity Insurance of Hawaii, Inc.
- First Security Insurance of Hawaii, Inc.
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.
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