Recently, credit rating giant, A.M. Best Company, Inc. has taken rating action on HCC Insurance Holdings, Inc. (HCC) and some of its subsidiaries.
The rating agency has affirmed the financial strength rating (FSR) at “A+” and the issuer credit ratings (ICR) at “aa” of the property and casualty companies in the Houston Casualty Group and HCC Life Insurance Company. At the same time, the FSR of American Contractors Indemnity Company and United States Surety Company was affirmed at “A+” while the ICR for these companies was upgraded to “aa” from “aa-”. A.M. Best has also affirmed the parent company’s 6.300% senior notes worth $300 million that are scheduled to expire in 2019 at “a”. All these ratings carry a stable outlook.
Apart from A. M. Best, HCC Insurance scores strongly with Standard & Poor's Corporation, Fitch Ratings and Moody’s Investors Service, Inc., the credit rating arm of Moody’s Corp. (MCO). The company’s major domestic and international insurance companies have FSR of “AA” assigned by Standard & Poor's, “AA” from Fitch and “A1” from Moody’s.
Rating affirmations or upgrades from credit rating agencies play an important part in retaining investor confidence in the stock as well as maintaining creditworthiness in the market. We believe that HCC Insurance’s present score with the credit rating agencies will help it write more business going forward.
Currently, HCC Insurance carries a Zacks Rank #3 (Hold). Better-ranked stocks in the insurance space that look attractive at current levels include ACE Ltd. (ACE) and AmTrust Financial Services, Inc. (AFSI). Both these sport a Zacks Rank #1 (Strong Buy).
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