A.M. Best Co. has affirmed the financial strength rating (FSR) of A- (Excellent) and issuer credit ratings (ICR) of “a-” of Hallmark Insurance Group (Hallmark Group) (Fort Worth, TX) and its operating members. Additionally, A.M. Best has affirmed the ICR of “bbb-” of the group’s holding company parent, Hallmark Financial Services, Inc. (Hallmark Financial) [NASDAQ: HALL] (Nevada). The outlook for all ratings is stable. (See below for a detailed listing of the companies and ratings.)
The affirmation of the ratings reflects Hallmark Group’s excellent risk-adjusted capitalization, favorable operating performance and financial flexibility afforded by Hallmark Financial. Furthermore, the ratings consider the organic surplus growth in recent years, as well as prior year significant equity contributions by Hallmark Financial to support the group’s growth initiatives. The acquisitions of various agency production sources by Hallmark Financial have resulted in a greater geographic and product spread of risk for the group.
These rating factors are partially offset by Hallmark Group’s above average net underwriting leverage and continued execution risk associated with the development of various parent company acquisitions, as well as geographic and product expansion initiatives. Since approximately two-thirds of Hallmark Group’s gross written premium is concentrated in three key states, earnings are susceptible to increased competition and changes in the regulatory, judicial and legislative environments.
The FSR of A- (Excellent) and ICRs of “a-” have been affirmed for the Hallmark Insurance Group and its following members:
- American Hallmark Insurance Company of Texas
- Hallmark Insurance Company (f/k/a Phoenix Indemnity Insurance Company)
- Hallmark Specialty Insurance Company (f/k/a Gulf States Insurance Company)
The ICR of “bbb-” has been affirmed for Hallmark Financial Services, Inc.
For Best’s Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.
A.M. Best Co.
Analysts
Michael T. Venezia, (908) 439-2200, ext. 5034
michael.venezia@ambest.com
or
Jeffrey Mango, CPA, (908) 439-2200, ext. 5204
jeffrey.mango@ambest.com
or
Public Relations
Jim Peavy, (908) 439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Morrow, (908) 439-2200, ext. 5378
rachelle.morrow@ambest.com
