A.M. Best Affirms Credit Ratings of The Travelers Companies, Inc. and Its Main Subsidiaries
October 31 2018 - 10:16AM
Business Wire
A.M. Best has affirmed the Financial Strength Rating
(FSR) of A++ (Superior) and the Long-Term Issuer Credit Ratings
(Long-Term ICR) of “aa+” of its main property/casualty (P/C)
subsidiaries of The Travelers Companies, Inc. (TRV) (headquartered
in New York, NY) [NYSE: TRV], collectively known as Travelers Group
(Travelers). In addition, A.M. Best has affirmed the FSR of A++
(Superior) and the Long-Term ICRs of “aa+” of Travelers Casualty
and Surety Company of America (TCSA) (Hartford, CT) and its
affiliates, Travelers Casualty and Surety Company of Europe Limited
(TCSCE) (United Kingdom) and Travelers Insurance Company of Canada
(TICC) (Ontario).
Concurrently, A.M. Best has affirmed the Long-Term ICRs and the
senior Long-Term Issue Credit Ratings (Long-Term IR) of “a+” of TRV
and its two wholly owned downstream holding companies, Travelers
Property Casualty Corp. and Travelers Insurance Group Holdings Inc.
(both headquartered in Hartford, CT). All outstanding securities
issued by the two downstream holding companies are guaranteed by
TRV. All other Long-Term IRs and Short-Term Issue Credit Ratings
(Short-Term IR) guaranteed by TRV and TRV’s indicative Long-Term
IRs also have been affirmed. The outlook of these Credit Ratings
(ratings) is stable.
A.M. Best also has affirmed the FSR of A (Excellent) and the
Long-Term ICR of “a” of The Dominion of Canada General Insurance
Company (Dominion) (Toronto, Ontario, Canada). The outlook of these
ratings is stable.
Additionally, A.M. Best has affirmed the FSR of A- (Excellent)
and the Long-Term ICR of “a-” of First Floridian Auto and Home
Insurance Company (First Floridian) (Tampa, FL). The outlook of
these ratings is stable.
Furthermore, A.M. Best has upgraded the FSR to A++ (Superior)
from A (Excellent) and the Long-Term ICR to “aa+” from “a+” of
Travelers Insurance Company Limited (TICL) (United Kingdom) to
reflect its inclusion as a member of Travelers. The outlook of
these ratings is stable. (Please see link below for a detailed
listing of the companies and ratings.)
The ratings of Travelers reflect the group’s balance sheet
strength, which A.M. Best categorizes as strongest, as well as its
very strong operating performance, favorable business profile and
appropriate enterprise risk management (ERM).
Historically, risk-adjusted capitalization has consistently been
strongly supportive of the group’s ratings. It exceeds the
threshold for the strongest categorization by a wide margin, as
measured by Best’s Capital Adequacy Ratio (BCAR). The assessment of
the balance sheet strength of the group also reflects its stable
loss reserve position, the use of a comprehensive reinsurance
program and high quality reinsurance partners. The group’s very
strong operating performance reflects consistently profitable
results supported by typically strong underwriting results and
steady investment income. The group has reported positive
underwriting income in nine of the past ten years, with 2011 being
the exception due to an increased amount of catastrophes. Based on
2017 direct premiums written, Travelers has the sixth-largest U.S.
market share for all lines, has the second-largest market share in
commercial lines and is the ninth-largest personal lines writer in
the United States. Travelers maintains a broad spread of risk in
that it offers a wide array of P/C coverages spread geographically
in all 50 states, the District of Columbia, Canada, England and
Ireland.
The ratings of TCSA and TCSCE reflect the group’s balance sheet
strength, which A.M. Best categorizes as strongest, as well as its
very strong operating performance, favorable business profile and
appropriate ERM.
The ratings of TICC reflect its balance sheet strength, which
A.M. Best categorizes as strongest, as well as its strong operating
performance, neutral business profile and appropriate ERM. The
ratings also reflect the implicit support it receives from its
direct parent, TCSA, as well as its ultimate parent, TRV.
The ratings of Dominion reflect its balance sheet strength,
which A.M. Best categorizes as strongest, as well as its marginal
operating performance, neutral business profile and appropriate
ERM. The ratings also reflect the implicit support it receives from
its ultimate parent, TRV.
The ratings of First Floridian reflect its balance sheet
strength, which A.M. Best categorizes as very strong, as well as
its adequate operating performance, limited business profile and
appropriate ERM.
Each of the groups discussed above also benefits from the
financial flexibility provided by TRV, which maintains financial
leverage that is in line with its current ratings, as well as
additional liquidity sources given its access to capital markets
and line of credit. TRV’s liquidity is bolstered by $1.39 billion
of liquid funds held at Sept. 30, 2018. Substantial excess
liquidity is net of sizable common stock repurchases over the past
several years. A.M. Best expects that earnings and cash flows from
TRV’s operating subsidiaries will allow it to support risk-adjusted
capitalization, should the need arise. At the same time, surplus
growth at each group occasionally has been limited over the past
five years by the payment of stockholder dividends to TRV. These
dividends vary based on capital needs at the various
subsidiaries.
A complete listing of The Travelers Companies, Inc.’s FSRs,
Long-Term ICRs and Long- and Short-Term IRs also is available.
This press release relates to Credit Ratings that have been
published on A.M. Best’s website. For all rating information
relating to the release and pertinent disclosures, including
details of the office responsible for issuing each of the
individual ratings referenced in this release, please see A.M.
Best’s Recent Rating Activity web page. For
additional information regarding the use and limitations of Credit
Rating opinions, please view Understanding Best’s Credit
Ratings. For information on the proper media use of Best’s
Credit Ratings and A.M. Best press releases, please view
Guide for Media - Proper Use of Best’s Credit Ratings and A.M.
Best Rating Action Press Releases.
A.M. Best is a global rating agency and information provider
with a unique focus on the insurance industry. Visit
www.ambest.com for more information.
Copyright © 2018 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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A.M. BestGreg Dickerson, +1 908 439 2200, ext.
5161Senior Financial
Analystgregory.dickerson@ambest.comorJennifer
Marshall, +1 908 439 2200, ext.
5327Directorjennifer.marshall@ambest.comorChristopher
Sharkey, +1 908 439 2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim
Peavy, +1 908 439 2200, ext. 5644Director, Public
Relationsjames.peavy@ambest.com
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