Fitch Ratings has affirmed the 'A' (Strong) Insurer Financial Strength (IFS) rating of
Fitch has also affirmed THG's senior unsecured notes at 'BBB'. The Rating Outlook remains Stable. All ratings have been subsequently withdrawn.
The ratings were withdrawn for commercial reasons.
Key Rating Drivers
THG has a moderate business profile, with competitive advantages in the
Although capital formation has been relatively modest in recent years due to return of capital to shareholders through dividends and share repurchase, capital sufficiently supports the company's business profile. Shareholders' equity declined by approximately 2% in 2021. The financial leverage ratio (FLR) was 20.9% at YE 2021, within rating sensitivities.
Statutory operating leverage (net premiums written to policyholders' surplus) remains higher than that of peer companies at 1.8x in 2021. The company reported strong statutory surplus growth to over
Additional balance sheet strengths include THG's high-quality, liquid investment portfolio that provides ample liquidity to cover its insurance reserves. Fitch believes THG's reserves are sufficient with recent favorable experience, primarily in commercial lines.
RATING SENSITIVITIES
Rating sensitivities pertaining to the noted ratings are no longer relevant given today's withdrawal.
Best/Worst Case Rating Scenario
International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from '
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg.
Following the withdrawal of ratings for THG, Fitch will no longer be providing the associated ESG Relevance Scores.
RATING ACTIONS
Entity / Debt
Rating
Prior
Ins Fin Str
A
Affirmed
A
Ins Fin Str
WD
Withdrawn
A
Ins Fin Str
A
Affirmed
A
Ins Fin Str
WD
Withdrawn
A
LT IDR
BBB+
Affirmed
BBB+
LT IDR
WD
Withdrawn
BBB+
senior unsecured
LT
BBB
Affirmed
BBB
senior unsecured
LT
WD
Withdrawn
BBB
junior subordinated
LT
BB+
Affirmed
BB+
junior subordinated
LT
WD
Withdrawn
BB+
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