AM Best affirms First Insurance Company of Hawaii ratings with stable outlook

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First Insurance Hawaii ratings affirmed

Highlights

AM Best affirmed First Insurance Company of Hawaii's Financial Strength Rating of A+ and Issuer Credit Ratings of 'aa' with stable outlooks.
The group's balance sheet shows the strongest risk-adjusted capitalization under Best’s Capital Adequacy Ratio, with pre-tax operating income in nine of the past ten years, including 2023 and 2024.
Tokio Marine Holdings' operational and financial support, plus synergies and reinsurance backing, contribute to ratings stability for First Insurance Company of Hawaii and its subsidiaries.

Rating affirmation and capital position

As reported by AM Best, First Insurance Company of Hawaii, Ltd., together with its reinsured subsidiaries in the First of Hawaii Group, has its Financial Strength Rating of A+ and its Long-Term Issuer Credit Ratings of "aa" affirmed with stable outlooks.

AM Best says the ratings reflect the group’s very strong balance sheet strength, adequate operating performance, neutral business profile and very strong enterprise risk management. The insurer maintains a longstanding position in Hawaii’s domestic market, where it ranks among the state’s leading insurance companies.

The rating agency adds that the balance sheet assessment is supported by the strongest level of risk-adjusted capitalization under Best’s Capital Adequacy Ratio, along with retained earnings, a conservative investment portfolio and favorable liquidity levels. It also notes the group posts pre-tax operating income in nine of the past 10 years, including 2023 and 2024, despite the effects of the 2023 Maui wildfire and subsequent reinsurance purchases.

Parent support and subsidiary coverage

AM Best also factors in operational, financial and enterprise risk management support from ultimate parent Tokio Marine Holdings, Inc. and lead insurance operating company Tokio Marine & Nichido Fire Insurance Co., Ltd. That support includes day-to-day operational synergies across U.S.-based subsidiaries, reinsurance backing and economic capital modeling that AM Best describes as superior to peer companies.

The affirmed ratings also apply to First Insurance Company of Hawaii’s property and casualty subsidiaries, First Fire and Casualty Insurance of Hawaii, Inc., First Indemnity Insurance of Hawaii, Inc. and First Security Insurance of Hawaii, Inc. For Hawaii’s insurance market, the decision signals continued rating stability for a major local carrier as the sector manages catastrophe exposure and reinsurance costs.

In a previous article, we explained how sovereign ratings pressure is rising amid geopolitical tensions and elevated fiscal spending.

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