Standard & Poor’s Ratings Services announced that it has raised its long-term counterparty credit and insurer financial strength ratings on Oslo-based non-life insurer Norway Energy & Marine Insurance ASA (NEMI) to ‘BBB’ from ‘BBB-‘ and has assigned a stable outlook.
“The upgrade reflects the company’s improved business fundamentals, comprising strong capitalization, recent strong operating performance, and a good competitive position,” stated S&P credit analyst Peter McClean.
“Offsetting factors include the unproven sustainability of NEMI’s operating performance and competitive position in a softening market and the company’s strong reliance on reinsurance,” said the announcement.
S&P indicated that the stable outlook reflects its “expectation that NEMI’s operating performance during 2005/2006 will continue to reflect its stated strategy of seeking profitable growth on an opportunistic basis. Any significant change in this strategy may cause the ratings to be reviewed.
“The combined ratio (before movements in security reserves) is expected to be at or below 95 percent for both 2005 and 2006, while the capital adequacy ratio will remain at an extremely strong level, according to Standard & Poor’s risk-based model. Over the medium term, should NEMI prove capable of continued outperformance of its peers, this may justify an upgrade.”
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