AM Best Affirms Credit Ratings of Berkshire Hathaway Homestate Insurance Company and Its Affiliates

AM Best Affirms Credit Ratings of Berkshire Hathaway Homestate Insurance Company and Its Affiliates
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Oldwick, NJ – (work wire) –better morning Confirmed the financial strength rating (FSR) of A++ (excellent) and the long-term issuer credit ratings (ICR long term) of “aa+” (highest) for Berkshire Hathaway Home Insurance (Omaha, NE) and its five property/victim subsidiaries. These companies are collectively referred to as the Berkshire Hathaway Homestate Companies (BHHC). The outlook for these credit ratings (the ratings) is stable. (See below for a detailed list of companies.)

The ratings reflect the strength of BHC’s balance sheet, which AM Best considers to be the strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

The ratings also reflect BHHC’s strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), historically profitable operating performance, conservative loss reserve and track record of successful executive team managing operations. AM Best notes that BHHC’s key operating metrics consistently outperform peer benchmarks, particularly when looking at the group’s long-term investment results. Additionally, these ratings take into account the additional financial flexibility and support provided by the group’s publicly traded parent company and ultimate shareholder, Berkshire Hathaway Inc. [NYSE: BRK A and BRK B].

The positive rating factors are offset somewhat by challenging market conditions and its business profile, which remains modestly concentrated in the workers compensation line of business, primarily in California. Nearly half of the BHHC’s direct writing in 2020 is from California. This focus has declined over time, as the group has seen a workers’ compensation business contract in California due to increased competition that has continued for several years. This decline was accompanied by a diversification of the workers’ compensation book outside of California and strong growth in other business categories, including the commercial vehicle and property lines. However, the large mass of California’s workers compensation business still exposes the group to a higher level of regulatory, judicial, legislative and competitive risk than its peers.

An additional rating factor for compensation is the risk associated with the allocation of large investments in equity securities, which remains a potential source of volatility in earnings and capital appreciation.

FSR for A++ (Superior) and long-term ICR for “aa+” (Superior) are confirmed with a stable outlook for Berkshire Hathaway Homestate Insurance Company and its following subsidiaries:

  • Cypress Insurance Corporation (San Francisco, California)

  • Oak River Insurance Company (Omaha, Nebraska)

  • Redwood Fire and Accident Insurance Company (Omaha, Nebraska)

  • Bahrain Holding Company Risk Insurance (North Liberty, IA)

  • Continental David Insurance Company (Denver, Colorado)

This press release relates to the credit ratings published on the AM Best website. For all rating information relating to the release and related disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see the web page of AM Best’s recent rating activity. For additional information regarding the use and limitations of credit rating opinions, please see the Best Credit Ratings Guide. For information on the proper use of Best’s credit ratings, preliminary Best credit ratings, and AM Best press releases, please see the Guide to the Proper Use of Best’s Ratings and Ratings.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company operates in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

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