AM Best confirms credit ratings of The Hanover Insurance Group, Inc. and its subsidiaries

OLDWICK, NJ- (BUSINESS CHP) –AM Best reaffirmed the financial strength rating (FSR) of A (excellent) and the issuer’s long-term credit rating (Long-Term ICR) of “a +” (excellent) of the property / injured subsidiaries of The Hanover Insurance Group, Inc. (THG) [NYSE: THG]which together are called Hanover. In addition, AM Best confirmed the long-term ICR of “bbb +” (Good) and all long-term credit ratings (Long-Term IR) of THG, which is the parent holding company. The outlook for these credit ratings (ratings) is stable. All companies are based in Worcester, Massachusetts. (See below for a detailed list of companies and ratings.)

The ratings reflect the strength of Hanover’s balance sheet, which AM Best as the strongest, as well as adequate operating results, favorable business profile and appropriate risk management in the enterprise (ERM).

The assessment of the group’s balance sheet strength is based on its risk-adjusted capitalization, which is at its strongest level, measured by Best’s capital adequacy ratio (BCAR). The assessment of the group’s balance sheet strength also reflects its stable loss reserve position, comprehensive reinsurance program and the benefits of the additional financial flexibility available through its ultimate parent, THG. The strength of the balance is somewhat offset by exposure to catastrophes and terrorist events. In addition, Hanover’s ratings reflect the group’s improving profitability over the past five years. The ratings also take into account the good business profile of the group and the variety of product offerings, especially within its commercial and specialized business lines. The assessment of Hanover’s business profile reflects its strong market position, as it ranks among the top 25 property organizations / victims in the United States and is a leader in many of its target market niches, along with its experienced management team. The group’s product range includes personal lines, key commercial offers and special coverage, with business expansion supported by strong links with its independent agency partners. Hanover has implemented a properly designed and built-in ERM program to deal with the organization’s risks. There is a formal framework and ongoing assessment and monitoring of key risks and tolerances is well established.

The FSR of A (Excellent) and the long-term ICR of “a +” (Excellent) were confirmed with solid prospects for the following subsidiaries of The Hanover Insurance Group, Inc .:

  • Specialized insurance company AIX

  • Allmerica Financial Alliance Insurance Company

  • Allmerica Financial Benefit Insurance Company

  • Campmed Casualty & Indemnity Company, Inc.

  • Citizens of America Insurance Company

  • Ohio Citizens Insurance Company

  • Citizens of the Midwest Insurance Company

  • Illinois Citizens Insurance Company

  • The American insurance company Hanover

  • Hanover Atlantic Insurance Company Ltd.

  • Hanover Insurance Company

  • Hanover Victim Company (formerly known as Hanover Lloyd Insurance Company)

  • Hanover Insurance Company, New Jersey

  • Massachusetts Bay Insurance Company

  • Company for victims of NOVA

  • Verlan Fire Insurance Company

The following long-term IRs have been confirmed with a stable outlook:

Hanover Insurance Group, Inc.—

– BBB + (Good) on USD 199.5 million 7.625% of senior unsecured bonds maturing in 2025 (of which USD 61.8 million remain outstanding)

– ‘bbb +’ (Good) on USD 375.0 million 4.5% of senior unsecured fixed rate banknotes maturing in 2026

– “bbb-” (Good) on USD 165.7 million 8,207% subordinated bonds maturing in 2027 (of which USD 50.1 million remain outstanding)

– “bbb +” (Good) on $ 300 million 2.5% of senior unsecured banknotes, maturing in 2030

The following indicative long-term IRs below shelf registration have been confirmed with a solid outlook:

Hanover Insurance Group, Inc.—

– ‘bbb +’ (OK) for senior unsecured debt

– “bbb-” (Good) for subordinated debt

– “bbb-” (Good) for preferred shares

This press release refers to the credit ratings that are published on the AM Best website. For all rating information related to the publication and related disclosures, including details of the service responsible for issuing each of the individual ratings listed in this issue, please see AM Best’s Recent rating activity Web page. For more information on the use and limitations of credit rating opinions, please see Guide to Credit Ratings Best. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessment and AM Best Press Releases, please see A guide to the proper use of ratings and Best ratings.

AM Best is a global credit rating agency, news publisher and data analysis provider specializing in the insurance industry. Headquartered in the United States, the company operates in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information visit www.ambest.com.

Copyright © 2022 by AM Best Rating Services, Inc. and / or its affiliates. ALL RIGHTS RESERVED.

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