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Page 1 of 24 Printed June 15, 2018
XXXXX Company Name Here XXXXXBEST’S RATING REPORT
BEST’S RATING REPORTBEST’S RATING REPORT
AM BEST
A Excellent
Financial Strength Rating
Odyssey Re Holdings Corp.Wilmington, Delaware, United States 19801AMB #: 050722 NAIC #: N/A FEIN#: 52-2301683Phone: Fax: Website: www.odygroup.com
Odyssey Reinsurance Company A300 First Stamford Place, Stamford, Connecticut, United States 06902
AMB #: 000539 NAIC #: 23680 FEIN#: 47-0698507
Phone: 203-977-8000 Fax: 203-965-7960 Website: www.odysseyre.com
Hudson Excess Insurance Company AWilmington, Delaware, United States 19801
AMB #: 014995 NAIC #: 14484 FEIN#: 45-5271776
Phone: 212-978-2800 Fax: Website: www.hudsoninsgroup.com
Hudson Insurance Company AWilmington, Delaware, United States 19801
AMB #: 003081 NAIC #: 25054 FEIN#: 13-5150451
Phone: 212-978-2800 Fax: 212-344-2973 Website: www.hudsoninsgroup.com
Hudson Specialty Insurance Company A100 William St., 5th Floor, New York, New York, United States 10038
AMB #: 012631 NAIC #: 37079 FEIN#: 75-1637737
Phone: 212-978-2800 Fax: 212-344-2973 Website: www.hudsoninsgroup.com
Newline Insurance Company Limited ACorn Exchange, 55 Mark Lane, London EC3R 7NE, United Kingdom
AMB #: 078187 NAIC #: N/A AIIN#: AA-1120062
Phone: 44-20-7090-1700 Fax: 44-20-7090-1701 Website: www.newlinegroup.com
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Page 2 of 24 Printed June 15, 2018
BEST’S RATING REPORT Odyssey Re Holdings Corp.
Odyssey Re Holdings Corp.Credit Report
Report Release Date: Rating Effective Date:
June 1, 2018 February 28, 2018
Disclosure Information: Refer to rating unit members for each company’s Rating Disclosure Form
Analytical Contacts
A.M. Best Rating Services, Inc.
Darian Ryan Jennifer Marshall, CPCU, ARM
Senior Financial Analyst Director
[email protected] [email protected]
+1(908) 439-2200 Ext. 5449 +1(908) 439-2200 Ext. 5327
Ultimate Parent: 058364 - Fairfax Financial Holdings Limited
A.M. Best Rating Unit: 050722 - Odyssey Re Holdings Corp.
RATING RATIONALE:The consolidated results for AMB #50722 Odyssey Re Holdings Corp. are used for the determination of the ratings for the operatingentities outlined below in the "Best's Credit Ratings for Group Members" section. All financial results within this report are for AMB#50722 Odyssey Re Holdings Corp. consolidated financial statements.
Best's Credit Ratings for Group Members:Rating Effective Date: February 28, 2018
Best's Financial Best's Issuer
Strength Ratings Credit Ratings
AMB# Company Rating Outlook Action Rating Outlook Action
050722 Odyssey Re Holdings Corp. Rating Unit
000539 Odyssey Reinsurance Company A Stable Affirmed a+ Stable Affirmed
014995 Hudson Excess Insurance Co A Stable Affirmed a+ Stable Affirmed
003081 Hudson Insurance Company A Stable Affirmed a+ Stable Affirmed
012631 Hudson Specialty Ins Co A Stable Affirmed a+ Stable Affirmed
078187 Newline Insurance Company Ltd A Stable Affirmed a+ Stable Affirmed
Refer to the following company profile page to view Issue Ratings, Odyssey Re Holdings Corp. (AMB#50722).
Rating Rationale:
Balance Sheet Strength: Strongest
• Odyssey Group's BCAR measures in the strongest category and its balance sheet benefits from a consistently strong reserveposition, favorable liquidity measures and adequate reinsurance protection.
• Reserves have historically developed favorably on both a calendar and accident year basis.
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Page 3 of 24 Printed June 15, 2018
BEST’S RATING REPORT Odyssey Re Holdings Corp.
• Liquidity measures are favorable and are enhanced by positive cash flows.
• The group benefits from favorable financial flexibility of its parent, Fairfax Financial Holdings and its sizable cash and marketablesecurities position.
Operating Performance: Strong
• Odyssey Group’s operating performance is strong and supported mainly by consistently profitable underwriting performance,which compares favorably to its reinsurance and commercial lines peers.
• The group has generated a lower than average investment yield over the past five years relative to its peers due in large part tothe investment strategy which takes a long-term value-oriented total return approach.
• The group benefits from the strong operational and financial support of its ultimate holding company, Fairfax Financial Holdings.
Business Profile: Neutral
• Odyssey Group operates in both the traditional reinsurance and specialty insurance sectors, affording it diversification that hasbeen increasingly important to reinsurers. While US based, it has global operations. Within the US its business is diversifiedgeographically and by line of business.
• Odyssey's management is long tenured and has a track record of producing solid underwriting profitability. The group's exposureto (re)insurance markets and event risk is well defined, dispersed and managed.
• An offsetting consideration in evaluating the group's business profile is its relatively modest market share within the globalreinsurance market, ranking about 29th in the world. While a solid position Odyssey is not viewed as a market leader.
Enterprise Risk Management: Appropriate
• The group has a comprehensive risk management framework, which has been developed over the past several years.
• Management team is experienced and knowledgeable.
• Risk management capabilities generally meet or exceed its risk profile.
Outlook
The group's rating outlook reflects A.M. Best's expectation that the group's strongest balance sheet strength will continue to besupported by strong and stable operating performance, favorable reserve development, diverse business profile and well definedEnterprise Risk Management program.
Rating Drivers
Factors that could lead to negative rating actions include the following: a reduction in the current favorable financial and liquidityposition at the group's parent, Fairfax Financial.
A significant reduction in underwriting income due to a deterioration in calendar year performance given less favorable accident yearresults as well as less favorable reserve development.
A significant reduction in the group's investment returns given losses associated with the group's investment strategy.
Financial Data Notes:
Time Period: Annual - 2017 Status: N/A Data as of: 05/21/2018
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Page 4 of 24 Printed June 15, 2018
BEST’S RATING REPORT Odyssey Re Holdings Corp.
Key Financial Indicators:
Key Financial Indicators (000)Year End
2017 2016 2015 2014 2013
Premiums Written
Direct Premiums Written 1,289,551 1,086,119 1,089,892 1,185,239 1,043,864
Gross Premiums Written 2,783,105 2,380,747 2,403,985 2,739,511 2,715,546
Net Premiums Written 2,495,887 2,100,177 2,094,985 2,393,833 2,376,942
Net Income 325,254 160,908 299,294 590,684 136,944
Total Assets 11,207,642 10,182,463 10,396,442 11,021,629 11,025,997
Total Equity 4,012,533 3,833,179 3,958,192 3,983,217 3,730,734Source: Bestlink - Best's Statement File - GlobalLocal Currency: US Dollar
Key Financial Indicators - A.M. Best Ratios (%)Year End
2017 2016 2015 2014 2013
Combined Ratio 97.6 88.9 84.9 84.8 84.2
Net Premiums Written to Equity 62.2 54.8 52.9 60.1 63.7
Liquidity
Liquid assets to total liabilities 98.0 104.1 109.6 113.5 103.7
Total investments to total liabilities 110.2 117.4 123.6 125.0 117.0Source: Bestlink - Best's Statement File - Global
Best's Capital Adequacy Ratio Summary -AMB Rating Unit (%)Confidence Level 95.0 99.0 99.5 99.6
BCAR Score 66.5 52.0 45.7 44.1Source: Best's Capital Adequacy Ratio Model - Universal
Credit Analysis:Balance Sheet Strength: Strongest
ORC's surplus has risen modestly over the past five year period, even after sizable dividend payments to its parent, ORH. Thecompany's capital position remains solid and is supportive of the group's premium writings and natural catastrophe losses during themost recent five year period. ORC maintains the strongest overall risk-adjusted capital position, as measured by its Best's CapitalAdequacy Ratio ("BCAR") analysis. The benefits of surplus generation and moderating premium growth, as well as the divestiture ofsignificant affiliated investments, have led to improved and sustainable capitalization over the five-year period. Odyssey Re's total returnoperating philosophy has historically supported surplus growth. The fixed income portfolio consists of conservative holdings with solidcredit quality and liquidity that further support the group's capitalization. The group's credit risk from reinsurance recoverables ismitigated, due to collateral held in the form of letters of credit and funds held. However, not all recoverables are backed by collateral. Asignificant risk relating to the capitalization of the group is catastrophe exposure. Management addresses these risks by managing to a1-in-250-year probable maximum loss and attempts to limit the net after-tax occurrence to any geographic zone to less than 25% ofconsolidated GAAP equity. The significant financial resources of its ultimate parent company, Fairfax, further enhance Odyssey Re'sfinancial flexibility.
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Page 5 of 24 Printed June 15, 2018
BEST’S RATING REPORT Odyssey Re Holdings Corp.
The group has experienced favorable loss reserve development in each of the past five years. Odyssey Re discounts reserves relatingto the indemnity portion of workers' compensation reserves of ORC.
Capitalization:
Capital Generation Analysis (000)Year End
2017 2016 2015 2014 2013
Common shares, ending balance 492 492 492 477 535
Paid-in capital - End bal 1,738,968 1,746,290 1,747,017 1,639,236 587,994
AOCI - ending balance 37,222 67,581 151,164 381,668 231,057
Other equity, end. bal. 29,299 29,299 29,299 29,299 29,299
Retained earnings, beginning balance 1,989,517 2,030,220 1,932,537 2,881,846 2,747,289
Retained earnings, net income 325,254 160,908 299,294 590,684 136,944
Retained earnings, common dividends 100,000 200,000 200,000 ... ...
Retained earnings, preferred dividends 1,611 1,611 1,611 2,188 2,044
Retained Earnings, other -6,608 ... ... ... ...
Retained earnings, ending balance 2,206,552 1,989,517 2,030,220 1,932,537 2,881,846
Total shareholder equity 4,012,533 3,833,179 3,958,192 3,983,217 3,730,734Source: Bestlink - Best's Statement File - GlobalLocal Currency: US Dollar
Holding Company Assessment:
Ultimate Parent: 058364 Fairfax Financial Holdings Limited
Fairfax Financial is the ultimate parent of Odyssey as well as several other insurance and non-insurance operations. Fairfax maintainsfavorable financial flexibility with debt to total capital at 4q17 of 25.6 and interest coverage of -0.4. The lower level of interest coverage ismoderated by Fairfax's practice of maintaining sizable amounts of cash and marketable securities at the holding company level.
Operating Performance: Strong
Odyssey Group has historically generated positive operating performance, driven by favorable underwriting results which compares wellwith its peer industry composite. The group generates a low investment yield relative to its peers due to the investment strategy. Whilethe defensive investment approach does not impair the group's liquidity or risk adjusted capital position, investment returns are affectedby the nature of the investments. The investment portfolio is managed by Hamblin Watsa Investment Counsel Ltd. ("Hamblin Watsa"),which is the investment management subsidiary of Fairfax, the group's ultimate parent.
The group's underwriting performance outperforms its US and global peers by a modest margin on a five year average basis. Thegroup's business mix has shifted over the past ten years from a predominantly long-tail portfolio of assumed liability reinsurance to aportfolio with a greater weighting of short-tail classes of business. Growth in the primary specialty insurance operations has led to anincreasing share of premiums from the insurance platform compared to prior years. The company has the benefit of adjusting itsbusiness mix between primary and reinsurance platforms, which provides increased flexibility as the market changes.
The group's underwriting performance remained generally consistent with a slight uptick in expense measures, given the declines inwritten and earned premium. The decreases are primarily due to a termination of a large Florida property contract and softening marketconditions. The provision for incurred losses and loss adjustment expenses benefited from favorable loss activity on business written inthe Other Liability Occurrence, Nonproportional Assumed Property, and Nonproportional Assumed Liability lines of business.
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Page 6 of 24 Printed June 15, 2018
BEST’S RATING REPORT Odyssey Re Holdings Corp.
In general, the investment strategy has negatively impacted the group's statutory results with a five year operating ratio in excess of theindustry's. The comparative performance is driven in part by statutory accounting rules, which require bonds to be held at cost versusmark to market. Although the value of the bonds would have been somewhat volatile under mark to market valuations, returns wouldhave been more favorable. Another reason is the increase in the financially distressed investments purchased by Fairfax and allocatedin part to Odyssey.
Financial Performance Summary (000)
Year End
2017 2016 2015 2014 2013
Pre-Tax Income 618,301 165,323 418,968 900,179 150,866
Net Income 325,254 160,908 299,294 590,684 136,944
Source: Bestlink - Best's Statement File - GlobalLocal Currency: US Dollar
A.M. Best Ratios (%)Year End
2017 2016 2015 2014 2013
Overall Performance:
Return on Assets 3.0 1.6 2.8 5.4 1.2
Return on Equity 8.3 4.1 7.5 15.3 3.7
Non-Life Performance:
Loss & LAE Ratio 66.0 56.5 53.8 54.5 55.2
Expense Ratio 31.7 32.4 31.1 30.4 29.0
Combined Ratio 97.6 88.9 84.9 84.8 84.2
Combined less Investment Ratio 91.4 79.7 75.5 76.8 75.8Source: Bestlink - Best's Statement File - Global
Combined Ratio (%)
0
20
40
60
80
100
2013 2014 2015 2016 2017
55.2 54.5 53.8 56.566.0
29.0 30.4 31.1 32.4 31.7
84.2 84.8 84.988.9
97.6
- Combined Ratio - Loss & LAE Ratio - Expense Ratio
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Page 7 of 24 Printed June 15, 2018
BEST’S RATING REPORT Odyssey Re Holdings Corp.
Business Profile: Neutral
Odyssey Group includes the U.S. reinsurance and insurance operations of ORH as well as a Lloyd's syndicate ("Newline Syndicate1218") and Newline Insurance Company Limited ("Newline") which is a UK-based insurance company. Reinsurance operations are ledby Odyssey Reinsurance Company ("ORC"), which provides treaty casualty and property reinsurance as well as facultative reinsurancefor small to medium-sized regional companies and specialized departments of major insurance companies. Products are providedprimarily through the broker market in the U.S. and through brokers and directly with insurers and reinsurers internationally. Specificlines of business include specialty casualty and general casualty; commercial and personal property; marine; aviation and space;accident and health; crop; and surety lines. Facultative casualty reinsurance is also provided for general liability; umbrella liability;directors' and officers' liability; professional liability and commercial automobile in the U.S. and facultative property reinsurance in LatinAmerica.
The U.S. insurance operations of Odyssey Group are conducted through Hudson Insurance Company ("Hudson"), Hudson SpecialtyInsurance Company ("Hudson Specialty") and Hudson Excess Insurance Company ("Hudson Excess"). The insurance operationsprovide coverage on both an admitted and non-admitted basis through in-house underwriting facilities and program administrators.Lines of business include professional liability; multi-peril crop; directors' and officers' liability; marine and energy; personal umbrella;specialty property; personal liability; personal and commercial auto and surety. Where program administrator relationships are used,the group seeks organizations that have a long and successful track record in their particular areas of expertise. Odyssey Group'smanagement has established strong control systems to monitor program administrators, including incentives to produce profitablebusiness.
Specialty insurance is offered in London through Newline Syndicate 1218 and Newline Insurance Company Limited. Business is writtenprimarily in non- U.S. liability lines, including professional indemnity, directors' and officers' liability, medical professional liability,financial institutions, cargo and specie, space and liability.
Enterprise Risk Management: Appropriate
Odyssey Group's enterprise risk management program incorporates the identification of major financial and operational risks,articulation of risk appetite through established upside aims and downside risk tolerances, formulation of risk governance at the Boardlevel, a Chief Risk Officer, development of a stochastic risk management model and the development of an enterprise risk controlframework. Core principles of Odyssey Group's enterprise risk management program include a long-term orientation, operatingprofitability valued over market share, value oriented investing and a compensation structure that supports a long term focus. Thegroup establishes acceptable exposures before risks are assumed. This is done through underwriting and investment guidelines, theestablishment of limits and underwriting authority levels and an integrated planning process. Internal audit is responsible for regularlytesting and validating key risk controls embedded in the business units. The risk management program includes a framework of severalcommittees including an enterprise risk management committee, reinsurance security committee, investment committee, underwritingrisk committees, a Fairfax Financial Holdings Limited ("Fairfax") global risk committee and a Board audit committee. Four full ERMreviews and meetings are conducted annually, with Board briefings throughout the year.
Financial Statements:
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Page 8 of 24 Printed June 15, 2018
BEST’S RATING REPORT Odyssey Re Holdings Corp.
Balance Sheet:
Balance Sheet:
Assets 12/31/2017 12/31/2017 12/31/2016
USD(000) % of total USD(000)
Cash And Equivalents 1,940,559 17.3 823,521
Long Term Fixed Maturity Investments 1,940,693 17.3 2,854,070
Equity Investments 1,070,921 9.6 1,187,856
Short Term Investments 2,095,823 18.7 1,742,357
Other Investments 881,879 7.9 843,556
Invested Assets 5,989,316 53.4 6,627,839
Receivables 1,015,668 9.1 1,133,714
Reinsurance Recoverable 896,665 8.0 700,688
Deferred Policy Acquisition Cost 201,994 1.8 165,661
Equity In Unconsolidated Subsidiary 809,638 7.2 398,019
Other Assets 353,802 3.2 333,021
Total Assets 11,207,642 100.0 10,182,463
Liabilities & Surplus 12/31/2017 12/31/2017 12/31/2016
USD(000) % of total USD(000)
Property / Casualty Reserves 5,463,595 48.8 4,876,848
Unearned Premium Reserves 909,078 8.1 722,455
Total Policy Reserves 6,372,673 56.9 5,599,303
Debt & Notes Payable 89,857 0.8 89,815
Other Liabilities 732,579 6.5 660,166
Total Liabilities 7,195,109 64.2 6,349,284
Equity - Common Stock 492 ... 492
Paid-In Capital 1,738,968 15.5 1,746,290
Accumulated Other Comprehensive Income 37,222 0.3 67,581
Retained Earnings 2,206,552 19.7 1,989,517
Other Equity 29,299 0.3 29,299
Total Equity 4,012,533 35.8 3,833,179
Total Liabilities & Equity 11,207,642 100.0 10,182,463Source: Bestlink - Best's Statement File - GlobalLocal Currency: US Dollar
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Page 9 of 24 Printed June 15, 2018
BEST’S RATING REPORT Odyssey Re Holdings Corp.
Summary of Operations:
Statement of Income (000)
Statement of Income
12/31/2017 12/31/2016
USD(000) USD(000)
Direct Premiums Written 1,289,551 1,086,119
Reins Assumed 1,493,554 1,294,628
Gross Premiums Written 2,783,105 2,380,747
Reins Ceded 287,218 280,570
Net Premiums Written 2,495,887 2,100,177
Change In Unearned Premiums 162,486 26,081
Net Premiums Earned 2,333,401 2,074,096
Net Investment Income 145,111 192,183
Net Realized Gains/(Losses) 378,081 -201,915
Total Revenue 2,856,593 2,064,364
Benefits & Reserves 1,539,522 1,171,825
Operating Expenses 742,189 747,305
Total Benefits & Expenses 2,281,711 1,919,130
Earnings before interest & taxes (EBIT) 574,882 145,234
Equity In Income Of Unconsolidated Subsidiaries 46,679 22,890
Interest Expense 3,260 2,801
Pre-Tax Income/(Loss) From Continuing Operations 618,301 165,323
Total Taxes 293,047 4,415
Net Income/(Loss) Before Minority Interest 325,254 160,908
Net Income/(Loss) From Continuing Operations 325,254 160,908
Net Income 325,254 160,908Source: Bestlink - Best's Statement File - GlobalLocal Currency: US Dollar
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Page 10 of 24 Printed June 15, 2018
BEST’S RATING REPORT Odyssey Re Holdings Corp.
Odyssey Re Holdings Corp.Report Revision Date:June 13, 2018
Company Attributes:
Industry: InsuranceBusiness Type: Property/CasualtyEntity Type: Intermediate Holding CompanyBusiness Status: In Business - Non-Insurer
Company History:
Date Incorporated: N/A Date Commenced: N/A Domicile: United States: Delaware
Insurance subsidiaries of Odyssey Re Holdings Corp. ("ORH") currently include Odyssey Reinsurance Company, Hudson InsuranceCompany, Hudson Specialty Insurance Company, Hudson Excess Insurance Company, Clearwater Select Insurance Company, NewlineInsurance Company Limited and Lloyd's Syndicate 1218.
In February 2011, the name of Odyssey America Reinsurance Corporation ("Odyssey America") was changed to Odyssey ReinsuranceCompany. In the text that follows, information concerning the history of current and former subsidiaries of ORH will be presented. Thename of Odyssey America will appear when applicable from a historical perspective.
ORH was incorporated on March 21, 2001, to serve as the holding company for the U.S.-based reinsurance subsidiaries of Fairfax. Inconnection with ORH's initial public offering in June 2001, two wholly-owned subsidiaries of Fairfax transferred 100% of the outstandingshares of Odyssey America to ORH in exchange for common stock of ORH, cash and term notes. Immediately following the initialpublic offering, approximately 26% of ORH was owned by public shareholders and 74% was owned by Fairfax subsidiaries.
In October 2009, then-majority shareholder Fairfax, which at the time owned 72.5% of ORH's common shares, completed a tender offerpursuant to which it acquired all of the outstanding shares of ORH common stock that it did not already own. Fairfax paid minorityshareholders of ORH $65 per share, for a total transaction value of approximately $1.1 billion. Upon completion of the tender offer,ORH de-listed its common stock from the New York Stock Exchange, where it had previously traded under the ticker symbol: ORH.
Odyssey Reinsurance Corporation was renamed Clearwater Insurance Company effective December 4, 2003. The company is theformer Skandia America Reinsurance Corporation, now a Delaware corporation, which was incorporated on May 15, 1974, under thelaws of New York to serve as the United States Branch of Skandia Insurance Company Ltd., Stockholm, Sweden. On May 31, 1996,Skandia America Reinsurance Corporation and its subsidiaries, including Hudson Insurance Company, were sold to Fairfax forapproximately $230 million.
Effective January 1, 2011, Odyssey America distributed all of the issued and outstanding shares of common stock of Clearwater toORH, which in turn exchanged the shares with TIG Insurance Group, Inc., a Fairfax subsidiary, in return for the redemption by TIG ofORH common shares of equal value. Prior to these transactions, Clearwater distributed (by means of a dividend) to Odyssey Americaall of the issued and outstanding shares of common stock of Hudson (which owned all of the issued and outstanding shares of HudsonSpecialty) and Clearwater Select. Hudson and Clearwater Select are now direct subsidiaries of Odyssey Reinsurance Company, andHudson Specialty remains a direct subsidiary of Hudson. Hudson continues to write business, principally primary property and casualtyinsurance.
On December 29, 2010, prior to the effectiveness of the transaction noted in the previous paragraph, Hudson issued 23,807 shares ofnewly created 5.5% Series A preferred stock (paying an annual dividend of 5.5% or $55 per share annually) and distributed theseshares to Clearwater as a dividend, and Clearwater Select issued 5,492 shares of newly created 5.5% Series A preferred stock (payingan annual dividend of 5.5% or $55 per share annually) and distributed these shares to Clearwater as a dividend.
Also in connection with these transactions, effective January 1, 2011, (a) the existing reinsurance agreement between Clearwater (as areinsurer) and Clearwater Select (as reinsured) was novated to Odyssey America (as reinsurer), (b) Clearwater entered into a ClaimsAdministration Services Agreement with Odyssey America, (c) Clearwater entered into a Management Services Agreement withRiverstone Resources LLC, a Fairfax subsidiary and (d) Clearwater entered into a Financial Support Agreement with Fairfax Inc., aFairfax subsidiary.
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BEST’S RATING REPORT Odyssey Re Holdings Corp.
Company History: (Continued...)TIG Reinsurance Company ("TIG Re") was incorporated in Nebraska on September 10, 1986. Effective January 2, 1992, the companywas re-domesticated to Connecticut. TIG Re was acquired by Fairfax in April of 1999, and subsequently became the parent company ofClearwater, as of October 26, 1999, and adopted the name Odyssey America Reinsurance Corporation before being subsequentlyrenamed Odyssey Reinsurance Company. As a result of this reorganization, Odyssey Reinsurance Company is now the flagship of thegroup and continues to actively write reinsurance business.
Odyssey Reinsurance Company, through its direct ownership of Newline UK Holdings Limited, operates its UK-based subsidiaries,including Newline Underwriting Management Limited, Lloyd's Syndicate 1218 and Newline Insurance Company Limited.
On October 28, 2003, Odyssey America purchased General Security Indemnity Company, a shell excess and surplus lines company,which was renamed Hudson Specialty Insurance Company. This company provides the group with the ability to write property andcasualty insurance on an excess and surplus lines basis. In December 2003, Odyssey America contributed all of the shares of HudsonSpecialty to Clearwater. In July 2010, Clearwater contributed all of the shares of common stock of Hudson Specialty to Hudson.
On November 15, 2004, ORH purchased Overseas Partners U.S. Reinsurance Company, a Delaware-domiciled reinsurance companythat had been in run-off since 2002, from Overseas Partners Limited. The company was renamed Clearwater Select InsuranceCompany and was contributed to Clearwater on November 30, 2004. In December 2010, Clearwater contributed all of the shares ofcommon stock of Clearwater Select to Odyssey America. On April 25, 2013, Clearwater Select redomesticated to Connecticut andbecame a Connecticut domiciled company. As of July 1, 2013, Clearwater Select's principal activity is to provide reinsurance toOdyssey Re group companies.
On May 11, 2012, Hudson Excess Insurance Company ("Hudson Excess") was incorporated in the State of Delaware. Hudson Excessis a wholly owned subsidiary of Hudson Specialty Insurance Company and was created to provide property, casualty and marine &transportation business on a non-admitted licensed excess and surplus lines basis in New York. On October 2, 2012, authority to writeproperty and casualty insurance business was granted by the Delaware Insurance Department. Effective July 21, 2015, Hudson Excessconverted from a domestic property and casualty to a domestic surplus lines insurer with the approval of the Delaware InsuranceDepartment.
Company Management:
Last significant update on 06/13/2018
Brian D. Young is the president and chief executive officer of ORH, effective April 1, 2011. Prior to joining the group in 1996, he was avice president of Transatlantic Reinsurance. Jan Christiansen is executive vice president and chief financial officer of ORH. Prior tojoining ORH in 2010, he served as group chief executive officer of Cunningham Lindsey Group Inc. Michael G. Wacek is executive vicepresident and chief risk officer of ORH. Prior to joining the Group in 1998, he was managing director of St. Paul Reinsurance CompanyLtd. in London.
Officers
President and CEO: Brian D. YoungEVP and CFO: Jan ChristiansenEVP and Chief Risk Officer: Michael G. Wacek
Regulatory:
Auditor:
The 2017 annual independent audit of the company was conducted by PricewaterhouseCoopers.
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BEST’S RATING REPORT Hudson Insurance Company
Hudson Insurance Company
Report Release Date: Rating Effective Date:February 28, 2018 February 28, 2018
Disclosure Information: View A.M. Best’s Rating Disclosure Form
Analytical Contacts
A.M. Best Rating Services, Inc.
Darian Ryan Jennifer Marshall, CPCU, ARMSenior Financial Analyst [email protected] [email protected]+1(908) 439-2200 Ext. 5449 +1(908) 439-2200 Ext. 5327
Ultimate Parent: 058364 - Fairfax Financial Holdings Limited
A.M. Best Rating Unit: 050722 - Odyssey Re Holdings Corp.
Best's Credit Ratings:Rating Effective Date: February 28, 2018
Best's Financial Strength Rating: A Outlook: Stable Action: AffirmedBest's Issuer Credit Rating: a+ Outlook: Stable Action: Affirmed
Five Year Credit Rating History:
Best's Financial Strength Ratings Best's Issuer Credit RatingsDate Rating Outlook Action Rating Outlook Action02/28/2018 A Stable Affirmed a+ Stable Affirmed10/20/2016 A Stable Affirmed a+ Stable Affirmed05/05/2015 A Stable Affirmed a+ Stable Affirmed04/03/2014 A Stable Affirmed a+ Stable Affirmed03/28/2013 A Stable Affirmed a+ Stable Upgraded
Rating Rationale:The company is part of the group given its integration with the other group members, support of the group's strategy and the explicitsupport provided by the lead member.
For more detail regarding the Rating Rationale and Best's Credit Report for the Rating Unit, view Odyssey Re Holdings Corp. (AMB#050722).
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BEST’S RATING REPORT Hudson Insurance Company
Financial Data Notes:
Time Period: Annual - 2017 Status: A.M. Best Quality Cross Checked Data as of: 06/04/2018
Key Financial Indicators:
Key Financial Indicators (000)Year End - December 31
2017 2016 2015 2014 2013
Premiums WrittenDirect 817,747 679,439 671,468 703,634 614,431Net 198,435 158,576 149,374 166,582 129,586
Pre-tax Operating Income ($000) 39,222 36,359 29,464 4,352 3,894Net Income 30,707 36,756 39,972 9,647 6,004Total Admitted Assets 1,204,068 1,159,905 1,082,816 1,042,652 819,044Policyholders' Surplus 428,384 453,157 457,868 440,175 413,949Source: Bestlink - Best's Statement File - P/C, US
Key Financial Indicators - A.M. Best Ratios (%)Year End - December 31
2017 2016 2015 2014 2013
ProfitabilityCombined Ratio 82.5 88.9 99.1 105.1 109.8Investment Yield 2.7 4.2 6.8 4.0 3.7Pre-Tax Return on Revenue 21.5 23.6 19.9 2.8 3.1
LeverageNon-Affiliated Investment Leverage 15.6 17.0 11.2 6.1 2.9Net Premiums Written to Policyholders' Surplus 0.5 0.3 0.3 0.4 0.3Net Leverage 2.3 1.9 1.7 1.7 1.3
LiquidityOverall Liquidity 155.9 165.4 174.8 175.0 205.4Operating Cash-Flow 120.2 146.4 101.2 152.9 94.2
Source: Bestlink - Best's Statement File - P/C, US
(*) Within several financial tables of this report, this company is compared against the Commercial Casualty Composite.(*) Data reflected within all tables of this report has been compiled from the company-filed statutory statement.
Credit Analysis:Balance Sheet Strength
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BEST’S RATING REPORT Hudson Insurance Company
Capitalization:
Capital Generation AnalysisYear End - December 31
2017 2016 2015 2014 2013
Pre-tax Operating Income ($000) 39,222 36,359 29,464 4,352 3,894Realized Capital Gains ($000) 396 1,634 11,813 6,419 2,164Income Taxes ($000) 8,911 1,237 1,305 1,124 55Unrealized Capital Gains ($000) -6,274 -686 14,127 27,641 12,919Net Contributed Capital ($000) -45,309 -41,309 -44,009 -5,363 -1,309Other Changes ($000) -3,897 529 7,604 -5,699 -2,566Change in Policyholders' Surplus($000)
-24,773 -4,711 17,693 26,226 15,047
Change in Policyholders' Surplus (%) -5.5 -1.0 4.0 6.3 3.8Source: Bestlink - Best's Statement File - P/C, US
Liquidity Analysis (%)Company Industry Composite
Year End - December 31 Year End - December 312017 2016 2015 2014 2013 2017 2016 2015 2014 2013
Quick Liquidity 86.5 52.8 16.6 19.6 26.4 20.9 20.9 21.5 23.9 24.0Current Liquidity 54.4 61.0 60.4 63.9 91.7 103.5 103.6 104.2 108.1 108.8Overall Liquidity 155.9 165.4 174.8 175.0 205.4 144.9 145.5 146.2 148.1 148.2Source: Bestlink - Best's Statement File - P/C, USIndustry Composite: Commercial Casualty Composite - Bestlink - Best's Statement File - P/C, US
Asset Liability Management – Investments:
Bond Portfolio - 2017 Bonds Distribution by Maturity (%)Years Years Average
0-1 1-5 5-10 10-20 20+ Maturity
Government 60.3 0.4 0.1 0.1 6.3 2.8Government Agencies and Municipal Bonds 16.6 ... ... 7.3 4.6 8.1Industrial and Misc. ... 4.3 ... ... ... 3.0Total 76.9 4.7 0.1 7.4 10.8 4.4
Source: Bestlink - Best's Statement File - P/C, US
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BEST’S RATING REPORT Hudson Insurance Company
Asset Liability Management – Investments: (Continued...)
Bond Distribution by Issuer TypeYear End - December 31
2017 2016 2015 2014 2013Bonds ($000) 155,043 322,353 313,924 308,168 284,086US Government (%) 2.4 18.3 9.3 1.0 1.1Foreign Government (%) 15.4 7.0 ... ... ...Foreign-All Other (%) 10.9 4.9 5.7 6.0 2.1State/Special Revenue-US (%) 71.4 69.8 85.0 93.0 94.8Industrial and Misc-US (%) ... ... ... ... 2.0Source: Bestlink - Best's Statement File - P/C, US
2017 Bond Distribution By Issuer Type
2.4%
15.4%
10.9%
71.4%
US Government (%) Foreign Government (%) Foreign-All Other (%) State/Special Revenue-US (%)
Source: Bestlink - Best's Statement File - P/C, US
Reserve Adequacy:
Loss and Allocated Loss Adjustment Expense Reserve Development
Year End - December 31
Calendar Year: 2017 2016 2015 2014 2013
Original Loss Reserves ($000) 176,633 159,693 151,168 160,062 143,722
Developed Reserves Thru Latest Year End ($000) 176,633 146,688 135,638 139,093 117,380
Development to Original (%) ... -8.1 -10.3 -13.1 -18.3
Development to Policyholder Surplus (%) ... -2.9 -3.4 -4.8 -6.4
Developed Reserves to Net Premiums Earned (%) 96.9 95.3 91.4 91.0 92.3
Unpaid Reserves @ Latest Year End ($000) 176,633 87,087 52,544 27,459 14,362
Unpaid Reserves to Developed Reserves (%) 100.0 59.4 38.7 19.7 12.2
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BEST’S RATING REPORT Hudson Insurance Company
Reserve Adequacy: (Continued...)
Year End - December 31
Accident Year: 2017 2016 2015 2014 2013
Original Loss Reserves ($000) 89,546 73,587 68,129 85,812 57,295
Developed Reserves Thru Latest Year End ($000) 89,546 71,813 68,714 82,278 54,721
Development to Original (%) ... -2.4 0.9 -4.1 -4.5
Unpaid Reserves @ Latest Year End ($000) 89,546 34,543 25,085 13,097 3,566
Accident Year Loss Ratio (%) 75.0 74.0 77.2 86.5 87.0
Accident Year Combined Ratio (%) 89.7 91.0 100.3 110.2 110.8Source: Bestlink - Schedule P (Loss Reserves) - P/C, US
Operating Performance
Financial Performance Summary (000)
Year End - December 312017 2016 2015 2014 2013
Pre-tax Operating Income 39,222 36,359 29,464 4,352 3,894
Net Income 30,707 36,756 39,972 9,647 6,004Source: Bestlink - Best's Statement File - P/C, US
A.M. Best Ratios (%)Company Industry Composite
Year End - December 31 Year End - December 312017 2016 2015 2014 2013 2017 2016 2015 2014 2013
Operating Ratio 73.5 72.3 72.5 90.7 94.6 89.4 88.1 85.1 84.3 81.5Realized Return on Invested Assets 2.7 4.5 9.0 5.2 4.1 3.9 4.3 4.2 4.3 6.5Pre-Tax Return on Revenue 21.5 23.6 19.9 2.8 3.1 10.0 12.1 14.7 15.3 18.6Return on Surplus 5.5 7.9 12.0 8.7 4.7 8.2 8.1 6.6 12.0 13.3Loss & LAE Ratio 67.8 71.9 76.0 81.4 86.0 72.6 71.2 68.1 68.2 66.8Expense Ratio 14.7 17.0 23.1 23.7 23.8 29.9 30.3 30.7 29.6 30.6
Combined Ratio 82.5 88.9 99.1 105.1 109.8 102.8 101.8 99.1 98.1 97.6Net Investment Yield 2.7 4.2 6.8 4.0 3.7 3.6 3.8 3.8 3.8 4.4Source: Bestlink - Best's Statement File - P/C, USIndustry Composite: Commercial Casualty Composite - Bestlink - Best's Statement File - P/C, US
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BEST’S RATING REPORT Hudson Insurance Company
Combined Ratio (%)
0
30
60
90
120
150
2013 2014 2015 2016 2017
86.0 81.4 76.0 71.9 67.8
23.8 23.7 23.117.0 14.7
109.8 105.199.1
88.982.5
- Combined Ratio - Loss & LAE Ratio - Expense Ratio
2017 Pure Loss Ratio by Product Line (%)
0
15
30
45
60
75
Allied Lines
Oth Liab O
ccur
Comm'l Auto Liab
Surety
Auto Physica
l
Oth Liab C
M
All Other
74.4
45.353.6
16.6
51.4
15.6
36.5
Source: Bestlink - Best's Statement File - P/C, US
Business ProfileThe following text is derived from Best's Credit Report on Odyssey Re Holdings Corp. (AMB# 050722):
Odyssey Group includes the U.S. reinsurance and insurance operations of ORH as well as a Lloyd's syndicate ("Newline Syndicate1218") and Newline Insurance Company Limited ("Newline") which is a UK-based insurance company. Reinsurance operations are ledby Odyssey Reinsurance Company ("ORC"), which provides treaty casualty and property reinsurance as well as facultative reinsurance
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BEST’S RATING REPORT Hudson Insurance Company
for small to medium-sized regional companies and specialized departments of major insurance companies. Products are providedprimarily through the broker market in the U.S. and through brokers and directly with insurers and reinsurers internationally. Specificlines of business include specialty casualty and general casualty; commercial and personal property; marine; aviation and space;accident and health; crop; and surety lines. Facultative casualty reinsurance is also provided for general liability; umbrella liability;directors' and officers' liability; professional liability and commercial automobile in the U.S. and facultative property reinsurance in LatinAmerica.
The U.S. insurance operations of Odyssey Group are conducted through Hudson Insurance Company ("Hudson"), Hudson SpecialtyInsurance Company ("Hudson Specialty") and Hudson Excess Insurance Company ("Hudson Excess"). The insurance operationsprovide coverage on both an admitted and non-admitted basis through in-house underwriting facilities and program administrators.Lines of business include professional liability; multi-peril crop; directors' and officers' liability; marine and energy; personal umbrella;specialty property; personal liability; personal and commercial auto and surety. Where program administrator relationships are used,the group seeks organizations that have a long and successful track record in their particular areas of expertise. Odyssey Group'smanagement has established strong control systems to monitor program administrators, including incentives to produce profitablebusiness.
Specialty insurance is offered in London through Newline Syndicate 1218 and Newline Insurance Company Limited. Business is writtenprimarily in non- U.S. liability lines, including professional indemnity, directors' and officers' liability, medical professional liability,financial institutions, cargo and specie, space and liability.
Leverage AnalysisCompany Industry Composite
Year End - December 31 Year End - December 31
A.M. Best Ratios (%) 2017 2016 2015 2014 2013 2017 2016 2015 2014 2013Net Premiums Written to Policyholders' Surplus 0.5 0.3 0.3 0.4 0.3 0.7 0.7 0.7 0.7 0.7Source: Bestlink - Best's Statement File - P/C, USIndustry Composite: Commercial Casualty Composite - Bestlink - Best's Statement File - P/C, US
2017 Top Product Lines of Business (Net Premiums Written)
36.4%
31.0%
8.7%
7.9%
7.5%
5.5%2.9%
Allied Lines Oth Liab Occur Comm'l Auto Liab Surety Auto Physical Oth Liab CM All Other
Source: Bestlink - Best's Statement File - P/C, US
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BEST’S RATING REPORT Hudson Insurance Company
2017 By-Line Business
Product Line
DirectPremiums
Written
ReinsurancePremiumsAssumed
ReinsurancePremiums
Ceded
NetPremiums
Written BusinessRetention
(%)($000) (%) ($000) (%) ($000) (%) ($000) (%)
Allied Lines 325,046 39.7 ... ... 252,848 40.2 72,199 36.4 22.2
Oth Liab Occur 232,765 28.5 50 0.5 171,228 27.2 61,587 31.0 26.5
Comm'l Auto Liab 76,141 9.3 ... ... 58,901 9.4 17,240 8.7 22.6
Surety 55,852 6.8 ... ... 40,156 6.4 15,696 7.9 28.1
Auto Physical 55,871 6.8 ... ... 40,940 6.5 14,931 7.5 26.7
Oth Liab CM 53,497 6.5 ... ... 42,530 6.8 10,967 5.5 20.5
All Other 18,575 2.3 9,704 99.5 22,464 3.6 5,815 2.9 27.7
Total 817,747 100.0 9,754 100.0 629,066 100.0 198,435 100.0 24.2Source: Bestlink - Best's Statement File - P/C, US
Geographical Breakdown By Direct Premium Writings
2017 2016 2015 2014 2013
Aggregate Alien 410,555 380,257 357,992 383,485 351,359
California 81,786 73,835 74,697 74,694 59,370
Texas 52,323 21,440 18,041 17,932 16,120
Tennessee 44,704 31,211 31,615 31,423 25,875
Florida 24,939 18,392 14,735 13,539 6,439
Washington 20,887 20,138 19,247 20,456 13,487
New York 15,821 12,235 11,770 11,946 12,936
Illinois 13,574 9,689 12,813 11,924 9,827
Michigan 12,727 6,728 7,428 7,580 6,120
Indiana 10,672 8,168 9,956 8,913 8,338
All Other 129,759 97,344 113,175 121,740 104,560
Total 817,747 679,439 671,468 703,634 614,431Source: Bestlink - Best's Statement File - P/C, US
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BEST’S RATING REPORT Hudson Insurance Company
Financial Statements:
Balance Sheet:
Balance Sheet:
Admitted Assets Year End - December 31
2017 ($000) 2016 ($000) 2017 (%) 2016 (%)
Bonds 155,043 322,353 12.9 27.8
Preferred Stock ... ... ... ...
Common Stock 26,323 42,943 2.2 3.7
Cash and Short-term Invest 237,550 60,571 19.7 5.2
Real Estate, Investment ... ... ... ...
Derivatives ... ... ... ...
Other Non-Affil Inv Asset 7,869 3,718 0.7 0.3
Investments in Affiliates 195,366 200,945 16.2 17.3
Real Estate, Offices ... ... ... ...
Total Invested Assets 622,152 630,530 51.7 54.4
Premium Balances 84,212 62,783 7.0 5.4
Accrued Interest 2,105 3,544 0.2 0.3
All Other Assets 495,598 463,048 41.2 39.9
Total Assets 1,204,068 1,159,905 100.0 100.0
Liabilities & Surplus Year End - December 31
2017 ($000) 2016 ($000) 2017 (%) 2016 (%)Loss and LAE Reserves 190,995 173,320 15.9 14.9Unearned Premiums 61,594 45,413 5.1 3.9Derivatives ... ... ... ...Conditional Reserve Funds 3,245 5,485 0.3 0.5All Other Liabilities 519,850 482,530 43.2 41.6
Total Liabilities 775,684 706,748 64.4 60.9
Surplus notes ... ... ... ...Capital and Assigned Surplus 300,980 300,980 25.0 25.9Unassigned Surplus 127,403 152,177 10.6 13.1
Total Policyholders' Surplus 428,384 453,157 35.6 39.1Total Liabilities and Surplus 1,204,068 1,159,905 100.0 100.0
Source: Bestlink - Best's Statement File - P/C, US
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BEST’S RATING REPORT Hudson Insurance Company
Summary of Operations and Operating Cash Flow:
Summary of Operations (000)
Year End - December 31Statement of Income 2017 Net Operating Cash Flow 2017
Premiums earned 182,254 Premiums collected 186,064
Losses incurred 96,395 Benefit & loss-related pmts 95,140
LAE incurred 27,233
Undwr expenses incurred 29,157 LAE & undwr expenses paid 58,727
Other expenses incurred ... Other income / expense ...
Dividends to policyholders ... Dividends to policyholders ...
Net underwriting income 29,470 Underwriting cash flow 32,197
Net transfer ...
Net investment income 16,527 Investment income 18,109
Other income/expense -6,775 Other income/expense -3,285
Pre-tax operating income 39,222 Pre-tax cash operations 47,022
Realized capital gains 396
Income taxes incurred 8,911 Income taxes pd (recov) 12,705
Net income 30,707 Net oper cash flow 34,317Source: Bestlink - Best's Statement File - P/C, US
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BEST’S RATING REPORT Hudson Insurance Company
Hudson Insurance CompanyReport Revision Date:June 13, 2018
Company Attributes:
Industry: InsuranceBusiness Type: Property/CasualtyEntity Type: Operating CompanyOrganization Type: StockBusiness Status: In Business - Actively UnderwritingMarketing Type: BrokerFinancial Size: XV ($2 Billion or greater)
Company History:
Date Incorporated: 01/16/1918 Date Commenced: 1918 Domicile: United States: Delaware
This company was incorporated with the temporary title Hudson Insurance Company of Delaware under the laws of Delaware on May1, 1978 to act as the vehicle for the transfer of the corporate domicile of Hudson Insurance Company from New York, New York toWilmington, Delaware, effective as of December 31, 1978. The predecessor company was originally incorporated on January 16, 1918,under the laws of New York and began business on December 14, 1918. The United States branch of Skandia Insurance CompanyLtd., Stockholm, Sweden (the "US branch") acquired complete financial control of that predecessor company on August 25, 1939.
The US branch, concurrent with its domestication in New York on July 1, 1974, passed direct stock ownership to Skandia AmericaReinsurance Corporation (now known as Clearwater Insurance Company), New York, New York. From November 1977 until February1996, Skandia America Reinsurance Corporation was a subsidiary of Skandia America Corporation, a wholly owned holding companyof Skandia US Holding Corporation, which was a wholly owned holding company affiliate of Skandia Insurance Company Ltd. (namedSkandia Insurance Company Ltd. from 1989 to 1993).
On February 21, 1996, Skandia America Corporation entered into an agreement to sell the former Skandia America ReinsuranceCorporation (now known as Clearwater Insurance Company) and its subsidiaries, including Hudson Insurance Company (Hudson), toFairfax Financial Holdings Limited, a Canadian financial services holding company. The acquisition became effective on May 31, 1996.
Effective January 1, 2011, Clearwater dividended the shares of Hudson to Odyssey America Reinsurance Corporation (a company thatwas subsequently renamed Odyssey Reinsurance Company in February 2011), and Hudson is now a direct, wholly owned subsidiaryof Odyssey Reinsurance Company, which is wholly owned by Odyssey Re Holdings Corp. (ORH). Fairfax is the ultimate 100%shareholder of ORH.
Primary insurance business was conducted until 1932. In 1935, the company became a professional reinsurer. In 1981, the companybegan to underwrite excess and special risk business. From 1985 to 1989, the company ceased writing new and renewal business. In1990, the company began writing specialty insurance business.
Paid-up capital of $7.5 million consists of 25,000 common shares at $300 par value each. All authorized shares are outstanding.
Company Operations:
Licensed Territory: (Current since 02/01/2010).The company is licensed in the District of Columbia, Puerto Rico, U.S. Virgin Islandsand all states.
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BEST’S RATING REPORT Hudson Insurance Company
Company Operations: (Continued...)
2017Rank Top 5 Lines of Business by NPW1 Allied Lines 36.4%2 Oth Liab Occur 31.0%3 Comm'l Auto Liab 8.7%4 Surety 7.9%5 Auto Physical 7.5%
2017Rank Top 5 Geographic Distribution by DPW1 Aggregate Alien 50.2%2 United States: CA 10.0%3 United States: TX 6.4%4 United States: TN 5.5%5 United States: FL 3.0%
Source: Bestlink - Best's Statement File - P/C, US
Company Management:
Last significant update on 02/26/2018
The Company's chairman is Brian D. Young, who is also the chairman of the board of Clearwater Select Insurance Company, HudsonSpecialty Insurance Company, Hudson Excess Insurance Company and Odyssey Reinsurance Company. Management of theCompany's affairs is directed by its president and chief operating officer, Christopher L. Gallagher.
Officers
CEO: Brian D. YoungPresident and COO: Christopher L. GallagherEVP and Chief Actuary: Elizabeth A. SanderEVP: Jan ChristiansenEVP: Alane Robinson CareyEVP: Christopher T. SuzrezSVP and CFO: Min HuangSVP, Corporate Secretary and General Counsel: Dina G. DaskalakisSVP and Controller: Anthony J. SlowskiSVP: Francis D. CerasoliSVP: James J. DanbrowneySVP: Matthew J. DeneenSVP: James T. DonovanSVP: Daniel J. GasserSVP: Ronald O. HonkenSVP: Margaret M. C. KilleenSVP: Peter H. LovellSVP: Jeffrey M. RubinSVP: William F. SchmidtSVP: Leslie D. ShoreSVP: Anthony TerraccianoSVP: Jean M. Willig
Directors
Jan ChristiansenChristopher L. GallagherMichael G. WacekBrian D. Young (Chairman)
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BEST’S RATING REPORT
Copyright © 2018 A.M. Best Company, Inc. and/or its affiliates. All rights reserved.No portion of this content may be reproduced, distributed, or stored in a database or retrieval system, or transmitted in any form or by any means without the prior written permis-sion of A.M. Best. While the content was obtained from sources believed to be reliable, its accuracy is not guaranteed. For additional details, refer to our Terms of Use available at A.M. Best website: www.ambest.com/terms.
Best’s Credit Rating Methodology | Disclaimer | Best’s Credit Rating Guide
Hudson Insurance Company
Regulatory:
Auditor: PricewaterhouseCoopers, LLC
An examination of the financial condition was made as of December 31, 2014, by the insurance department of Delaware. The 2016annual independent audit of the company was conducted by PricewaterhouseCoopers, LLC. The annual statement of actuarial opinionis provided by Elizabeth A. Sander, FCAS, MAAA, Executive Vice President & Chief Actuary.
A Best's Financial Strength Rating opinion addresses the relative ability of an insurer to meet its ongoing insurance obligations. The ratings are not assigned to specific insurance policies or contracts anddo not address any other risk, including, but not limited to, an insurer's claims-payment policies or procedures; the ability of the insurer to dispute or deny claims payment on grounds of misrepresentationor fraud; or any specific liability contractually borne by the policy or contract holder. A Financial Strength Rating is not a recommendation to purchase, hold or terminate any insurance policy, contract orany other financial obligation issued by an insurer, nor does it address the suitability of any particular policy or contract for a specific purpose or purchaser.
A Best's Issue/Issuer Credit Rating is an opinion regarding the relative future credit risk of an entity, a credit commitment or a debt or debt-like security.
Credit risk is the risk that an entity may not meet its contractual, financial obligations as they come due. These credit ratings do not address any other risk, including but not limited to liquidity risk, marketvalue risk or price volatility of rated securities. The rating is not a recommendation to buy, sell or hold any securities, insurance policies, contracts or any other financial obligations, nor does it address thesuitability of any particular financial obligation for a specific purpose or purchaser.
In arriving at a rating decision, A.M. Best relies on third-party audited financial data and/or other information provided to it. While this information is believed to be reliable, A.M. Best does notindependently verify the accuracy or reliability of the information. Any and all ratings, opinions and information contained herein are provided "as is," without any express or implied warranty.
Visit http://www.ambest.com/ratings/notice.asp for additional information or http://www.ambest.com/terms.html for details on the Terms of Use. For current rating visit www.ambest.com/ratings
Best's Credit Rating Methodology | Disclaimer | Best's Credit Rating Guide
Copyright © 2018 A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED. No part of this report or document may be distributed in anyelectronic form or by any means, or stored in a database or retrieval system, without the prior written permission of A.M. Best. For additional details,refer to our Terms of Use available at A.M. Best website: www.ambest.com/terms.
Regulatory:
Auditor: PricewaterhouseCoopers, LLC
An examination of the financial condition was made as of December 31, 2014, by the insurance department of Delaware. The 2016annual independent audit of the company was conducted by PricewaterhouseCoopers, LLC. The annual statement of actuarial opinionis provided by Elizabeth A. Sander, FCAS, MAAA, Executive Vice President & Chief Actuary.
A Best's Financial Strength Rating opinion addresses the relative ability of an insurer to meet its ongoing insurance obligations. The ratings are not assigned to specific insurance policies or contracts anddo not address any other risk, including, but not limited to, an insurer's claims-payment policies or procedures; the ability of the insurer to dispute or deny claims payment on grounds of misrepresentationor fraud; or any specific liability contractually borne by the policy or contract holder. A Financial Strength Rating is not a recommendation to purchase, hold or terminate any insurance policy, contract orany other financial obligation issued by an insurer, nor does it address the suitability of any particular policy or contract for a specific purpose or purchaser.
A Best's Issue/Issuer Credit Rating is an opinion regarding the relative future credit risk of an entity, a credit commitment or a debt or debt-like security.
Credit risk is the risk that an entity may not meet its contractual, financial obligations as they come due. These credit ratings do not address any other risk, including but not limited to liquidity risk, marketvalue risk or price volatility of rated securities. The rating is not a recommendation to buy, sell or hold any securities, insurance policies, contracts or any other financial obligations, nor does it address thesuitability of any particular financial obligation for a specific purpose or purchaser.
In arriving at a rating decision, A.M. Best relies on third-party audited financial data and/or other information provided to it. While this information is believed to be reliable, A.M. Best does notindependently verify the accuracy or reliability of the information. Any and all ratings, opinions and information contained herein are provided "as is," without any express or implied warranty.
Visit http://www.ambest.com/ratings/notice.asp for additional information or http://www.ambest.com/terms.html for details on the Terms of Use. For current rating visit www.ambest.com/ratings
Best's Credit Rating Methodology | Disclaimer | Best's Credit Rating Guide
Copyright © 2018 A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED. No part of this report or document may be distributed in anyelectronic form or by any means, or stored in a database or retrieval system, without the prior written permission of A.M. Best. For additional details,refer to our Terms of Use available at A.M. Best website: www.ambest.com/terms.