A.M. Best Co. announced that it has affirmed the financial strength rating of A- (Excellent) of U.K.-based Sunderland Marine Mutual Insurance Company Ltd. (SMMI) with a stable outlook.
“The rating reflects continuing improvement in the company’s risk-adjusted capital position, strong performance and a good specialist business profile,” said Best. It “expects the company to build on the improvement in its 2003 risk-adjusted capitalisation. On a risk-adjusted basis, a substantial anticipated increase in surplus from retained earnings is expected to offset forecast increases in net premiums and reserves in 2004.”
Best also said it “believes that SMMI’s capital is strongly protected by its reinsurance programme, which includes whole account protection (up to a pre established aggregate) and excess of loss cover, which provides protection above the level required for the company’s maximum possible loss. The company’s programme is placed with reinsurers rated Excellent or above by A.M. Best.”
The rating agency expects SMMI to achieve a combined ratio below 95 percent in 2004 (92.8 percent in 2003) “based on a continuation of favourable underwriting conditions in the company’s specialist markets and SMMI’s selective underwriting approach. It is anticipated that the company will benefit from profitable business from Harlock Murray Underwriting Ltd. (Canada), which has expanded as a result of a new joint venture interest acquired by Salvus Bain (Management) Ltd.–SMMI’s management company–in Murray Underwriting Ltd. (Canada). A.M. Best expects gross written premium from this source to be approximately GBP 5 million (USD 8.9 million) in 2004.”
The bulletin concluded: “SMMI has a good leadership profile in certain niche sectors including fishing vessels, inland and coastal vessels and aquaculture. SMMI’s account is well diversified on a geographical basis as a result of business written through its branch offices in Australia, New Zealand and North America. The company uses its technical expertise and risk management to develop its business profile and to increase the risk awareness of both its underwriters and insureds.”
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