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Investing.com -- On April 8, 2025, Moody’s Ratings affirmed the Aa1 insurance financial strength (IFS) rating of Berkshire Hathaway (NYSE:BRKb) Assurance Corporation (BHAC). BHAC is a financial guaranty insurance company owned by Berkshire Hathaway Inc . (NYSE:BRKa)'s subsidiaries Columbia Insurance Company and National Indemnity Company, both prominent members of Berkshire's insurance segment. The rating outlook for BHAC remains stable.
The Aa1 IFS rating of BHAC reflects the explicit support from Columbia, which is provided through a corporate guaranty in favor of BHAC. This guaranty ensures the timely payment of all future obligations and liabilities of BHAC under its financial guaranty insurance policies. The rating is also influenced by implicit support from both Columbia and National Indemnity Company.
BHAC's stand-alone credit profile is characterized by its robust capital position and its high-quality insured portfolio of US public finance credits, most of which are insured by other financial guarantors. However, these strengths are balanced by the company's inactive status and limited underwriting, risk management, and surveillance infrastructure.
BHAC's Aa1 IFS rating is tied to Columbia's IFS rating and includes a three-notch uplift from BHAC's A1 stand-alone credit profile, based on both explicit and implicit support from Columbia and National Indemnity Company. An upgrade of Columbia's rating could lead to an upgrade of BHAC's rating.
On the other hand, a downgrade of Columbia's rating or a significant decline in BHAC's capital adequacy metrics due to a deterioration in the credit quality of the insured portfolio, investment losses, or extensive capital extraction through dividends could lead to a downgrade of BHAC's rating.
Berkshire Hathaway Assurance Corporation is an indirect, wholly-owned subsidiary of Berkshire Hathaway Inc. The company provides financial guaranty insurance on US public finance bonds. As of December 31, 2024, BHAC had a statutory capital and surplus of $1.3 billion.
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