Fitch Assigns 'A' IFS Rating to OneBeacon Subsidiary
KEY RATING DRIVERS
Fitch views OBIA as 'core' to its parent, OneBeacon, as defined in the agency's Insurance Rating Methodology. As such Fitch has taken a group approach and set the rating of OBIA at the same level as the other OneBeacon group members.
OBIA shares common management, branding, back-office functions, and other systems with other OneBeacon group members. Additionally, OBIA is part of a quota share reinsurance agreement within OneBeacon. In totality, Fitch believes that capital is fungible amongst group members.
Fitch's last rating action on OneBeacon was on March 29, 2016. Fitch affirmed the ratings and revised the Rating Outlook to Stable from Negative.
Key rating triggers that could lead to a downgrade of OneBeacon's ratings are:
--Adverse loss reserve development of 5% or greater of prior year equity;
--Sustained GAAP calendar year combined ratios over 100% or sustained fixed charge coverage below 5.0x;
--Financial leverage above 30%.
Key rating triggers that could lead to an upgrade of OneBeacon's ratings are:
--Improvement in competitive market position while continuing to produce favorable operating results while not sustaining deterioration in other credit factors.
FULL LIST OF RATING ACTIONS
Fitch has assigned the following rating with a Stable Outlook:
OBI America Insurance Company
--IFS at 'A'.
Fitch took no rating action on the following ratings:
OneBeacon U. S. Holdings, Inc.
--$275 million 4.6% due Nov. 9, 2022 'BBB'.
OneBeacon U. S. insurance subsidiaries:
Atlantic Specialty Insurance Company
Homeland Insurance Company of New York
Homeland Insurance Company of Delaware
OBI National Insurance Company