Securities Finance Industry News | BNY Mellon Insurance Subsidiaries Receive Confirmed Ratings

AM Best, an alternative risk transfer entity rating agency, has affirmed the financial strength rating of “A” (Excellent) and the issuer’s long-term credit rating of “a+” (Excellent) for two subsidiaries of BNY Mellon.

The outlook for these credit ratings is stable.

BNY Trade Insurance Ltd and The Hamilton Insurance Corp are single parent captive insurers of the global financial services company.

A captive insurer is an insurance company that insures the risks of an associated company – in this case, BNY Mellon’s parent company. Captive insurance is an alternative risk transfer arrangement suitable for the risks unique to an organization that does not have appropriate, accessible or affordable cover in the commercial insurance market.

As such, BNY Trade and Hamilton provide comprehensive reinsurance coverage and products to BNY Mellon.

AM Best says BNY Trade’s and Hamilton’s ratings reflect their respective balance sheet strengths, as well as strong operating performance, a neutral business profile and appropriate business risk management.

The rating agency notes that BNY Trade’s ratings also reflect its steady growth in surplus, fueled by steady premium growth and favorable profitability over the past few years. Similarly, Hamilton’s ratings are bolstered by its stable premium, strong liquidity and consistent level of investment income.

AM Best adds that both BNY Trade and Hamilton benefit from BNY Mellon’s strong company-wide policies and procedures regarding risk management, resilience, corporate governance and compliance.

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