Profile: HCC Insurance Holdings Inc (HCC.N)
4 May 2015
HCC Insurance Holdings, Inc., incorporated on March 27, 1991, is a specialty insurer with offices in the United States, the United Kingdom, Spain and Ireland. The Company underwrites over 100 classes of specialty insurance products in approximately 180 countries through five insurance underwriting segments. The Company’s insurance underwriting segments are United States Property & Casualty, Professional Liability, Accident & Health, U.S Surety & Credit and International. The Company markets insurance products through a network of independent agents and brokers, through managing general agents owned by the company, and directly to consumers. The Company’s investing segment includes consolidated investment portfolio, investment income, investment related expenses, realized investment gains and losses, and other-than-temporary impairment credit losses on investments. It is also engaged in the crop insurance business.
United States Property & Casualty Segment
The Company’s United States Property & Casualty segment includes specialty lines of insurance such as aviation, small account errors and omissions liability (E&O), public risk, disability, contingency, primary and excess casualty, technical and construction property, title and mortgage reinsurance, residual value, employment practices liability (EPLI), and brown water marine written in the United States. The majority of the business is coverage and claims are reported and settled on a short to medium-term basis. The aviation, public risk, contingency, technical and construction property, and brown water marine lines are exposed to natural peril and other catastrophic occurrences. Business is produced from wholesale and specialty retail brokers.
In the United States, the Company provides customized coverages for both private and commercial aircraft operators, excluding major U.S. airlines. Private coverage includes planes ranging in size from small single-engine aircraft to executive jets. With the Company’s commercial and special risk products, it provides coverage for risks such as air ambulances, vintage war birds and rotor wing aircraft. The Company writes aviation business internationally, including complex accounts such as national armed forces, law enforcement agencies and regional airlines. The Company provides insurance coverage and associated risk management services to municipal entities and special districts. Types of coverage provided include automobile physical damage, automobile liability, boiler and machinery, crime, EPLI, general liability, inland marine, law enforcement liability, public official liability and property.
The Company is an underwriter of specialty sports and entertainment disability products, providing coverage of irreplaceable human assets such as high profile athletes, entertainers and business executives. The Company provides weather insurance and event cancellation, covering events such as collegiate championships, all-star games and large musical concerts. The Company writes kidnap and ransom insurance, providing coverage throughout the world. The Company writes property damage, business interruption and ancillary coverage for petroleum, chemical, petrochemical and process industry companies. The Company’s construction property team writes builder’s risk coverage for large projects, such as apartments, hotels, roads and power plants.
Professional Liability Segment
The Company’s Professional Liability segment consists of its directors’ and officers’ (D&O) liability business. The Company writes related professional liability and crime business coverages, including large account E&O liability, fiduciary liability, fidelity and bankers blanket bonds and EPLI for some D&O policyholders. The business is written for both the United States based and International-based policyholders from the Company’s offices in the United States, the United Kingdom and Spain. The Company writes both primary and excess policies for public and private companies. The Company’s policies cover a large number of commercial classes and financial institution classes, which include investment banks, depository institutions, private equity companies, insurance companies, and brokers and investment advisors.
Accident & Health Segment
The Company’s Accident & Health segment includes medical stop-loss and short-term domestic and international medical products written in the United States. Medical stop-loss insurance provides protection for catastrophic losses to employers that self-fund their employee benefit plans. The Company delivers this insurance to employers through insurance brokers, consultants and third party administrators. The Company’s medical stop-loss claims unit deals with the complex nature of catastrophic health claims and works closely with employers and their plan administrators to control plan costs.
The Company’s short-term medical insurance provides temporary coverage, up to eleven months, for individuals in the United States without primary insurance during transitional periods. The Company’s international medical insurance plans provide health insurance and specialized travel services to individuals outside their home country. Several types of international medical products are offered, including short and long-term individual and group plans. Both the short-term domestic and international medical products are purchased through an Internet portal accessed by consumers, brokers and consultants.
U.S. Surety & Credit Segment
The Company’s U.S. Surety & Credit segment conducts business through separate specialty surety underwriting operations and credit underwriting operations. The Company’s surety business includes contract surety bonds, commercial surety bonds and bail bonds. Commercial surety includes license and permit bonds, court bonds for fiduciaries as well as appeal bonds, and plug and abandonment bonds for the energy sector. The Company’s credit business provides insurance policies that insure against the risk of non-payment on trade-related transactions and financings. These policies are provided to manufacturers, banks and trading companies. Coverage is provided on a single debtor or multiple debtor basis, with multi-debtor coverage generally provided on an excess of loss basis. The Company provides political risk insurance and the business is large limit and large premium business. Underwriting includes credit quality analysis of individual transactions, as well as controlling aggregation of limits by debtor and by country.
The Company’s International segment includes energy, property treaty, liability, surety, credit, property, ocean marine, accident and health and other smaller product lines written from operations in the United Kingdom, Spain and Ireland. The Company’s energy, ocean marine, property treaty, property and accident and health lines are exposed to natural peril and other catastrophic occurrences. The Company provides coverage for insureds involved in areas of energy, ranging from upstream exploration and production, through midstream storage and transmission, to downstream refining and petrochemical activities. Offshore risks include drilling rigs, production and gathering platforms, and pipelines. The Company’s property treaty line provides treaty coverages including property catastrophe, property risk and engineering, which covers property risks during construction.
The Company’s liability lines primarily include United Kingdom professional indemnity, employers’ liability and public liability coverages. Professional indemnity coverages are focused on small and medium size enterprises and cover a range of professions. The employers’ liability and public liability lines provide coverage on both a primary and excess basis for a range of companies. The Company’s surety business specializes in performance bonds for construction companies and also writes customs, pension, environment, auctioneer and other miscellaneous classes of bonds in the United Kingdom, Ireland, Spain and France. The Company writes direct and facultative property coverage for classes including manufacturing, retail, real estate, hotels and municipalities. The Company provides coverage for both physical damage and business interruption on a worldwide basis to companies ranging in size from small to multinational.
HCC Insurance Holdings Inc
13403 Northwest Fwy
HOUSTON TX 77040-6006