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Analyst Blog

Recently, A.M. Best Co. affirmed the issuer credit rating (ICR) of Hartford Financial Services Group Inc. (HIG - Analyst Report) at “bbb+” along with all the debt ratings of the company. The rating agency also revised the ICR of Hartford Life, Inc. to “bbb-” from “bbb+” and downgraded its debt ratings.

A.M. Best also affirmed the financial strength rating (FSR) of Hartford Fire Insurance Company and its pooling subsidiaries and affiliates at “A” and their ICR at “a+.” Further, the rating agency changed the status of all the above mentioned ratings from ‘under review with developing implications’ to ‘stable.’

Moreover, the rating agency downgraded the FSR of Hartford Financial’s subsidiaries -- Hartford Life and Accident Insurance Company (HLA), Hartford Life Insurance Company (HLIC), Hartford Life and Annuity Insurance Company (ILA) and Hartford International Life Reassurance Corporation (HILRE) – to “A-” from “A” and their ICR to “a-” from “a.” 

The rating agency also revised the debt ratings of Hartford Life Global Funding Trusts, Hartford Life Institutional Funding and HLIC downward. The outlook for these ratings was changed to ‘stable’ from ‘under review with negative implications.’

The ratings of Hartford Fire and its subsidiaries are based on strong risk-adjusted capitalization, underwriting and operating strength and solid market positioning in the property and casualty business, partially offset by the underwriting losses and weak operating results in the recent quarters and volatility in earnings and return on equity. The downgrade of Hartford Life was based on the reduced business profile due to the divestitures in 2012.

Hartford Financial currently carries a Zacks Rank #4 (Sell). Other multi-line insurers worth considering are Ageas SA/NV (AGESY - Snapshot Report), Assured Guaranty Ltd. (AGO - Analyst Report) and CNO Financial Group Inc. (CNO - Analyst Report). All these companies carry a Zacks Rank #1 (Strong Buy).