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Hartford Financial & Units Get Rating Action From AM Best

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The Hartford Financial Services Group, Inc. (HIG - Free Report) and its subsidiaries recently received rating action from credit rating agency AM Best. The rating giant has reiterated the company's Long-Term Issuer Credit Rating (Long-Term ICR) of "a-" and the Long- and Short-Term Issue Credit Ratings (Long-Term IR; Short-Term IR).

For Hartford Insurance Group that comprises Hartford Fire Insurance Company and its pooling subsidiaries and affiliates, AM Best has reiterated the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term ICRs of "aa-". Concurrently, the rating giant maintained stable outlook for these ratings.

For the company’s group benefits unit — Hartford Life and Accident Insurance Company (HLA) — the rating giant has enhanced the FSR to A+ (Superior) from A (Excellent) and the Long-Term ICR to "aa-" from "a+". The outlook of these ratings has also remained stable.

This rating action clearly reflects the rating giant’s optimism over Hartford Financial’s performance, backed by its robust balance sheet, improved operational excellence, favorable business profile and effectiveenterprise risk management abilities.

On one hand, rating affirmations or upgrades from credit rating agencies play an important role in retaining investor confidence and maintaining credit worthiness. On the other hand, rating downgrades damage business, apart from increasing the cost of future debt issuances. We believe the ratings will help Hartford Financial to retain investor confidence and write more businesses, going forward.

Shares of this Zacks Rank #4 (Sell) insurer have lost 28.2% in a year compared with the industry’s decline of 22.1%. The prevailing low interest rate environment is somewhat weighing on the company’s positives. Also, Hartford Financial expects its premiums to be negatively impacted by the coronavirus outbreak due to exposure, business closures and reductions.

Nevertheless, the company has been focused on its core U.S. operations and getting rid of its non-core businesses through divestitures. Such initiatives and effective capital deployment measures are likely to drive the company’ shares in the days ahead.

Stocks to Consider

Some better-ranked insurance stocks include CNO Financial Group, Inc. (CNO - Free Report) , Kinsale Capital Group, Inc. (KNSL - Free Report) and Palomar Holdings Inc. (PLMR - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CNO Financial, Kinsale Capital and Palomar have a trailing four-quarter average positive surprise of 12.51%, 3.44% and 10.93%, respectively.

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