Standard & Poor’s Ratings Services announced that it has affirmed its ‘A’ long-term counterparty credit and insurer financial strength ratings on Assuranceforeningen Gard – gjensidig – (Gard P&I), the Norway-based protection and indemnity (P&I) marine mutual club.
S&P also said it has affirmed its ‘A-‘ long-term counterparty credit and insurer financial strength ratings on Gard P&I’s Bermuda-based subsidiary, Gard Marine & Energy Ltd. (Gard M&E). The outlook on both entities is stable.
“The ratings on Gard P&I and Gard M&E reflect the group’s very strong management and administration, as well as its strong and highly specialized competitive positions in the Nordic and international P&I insurance markets,” S&P said. “The Gard group now also enjoys a leading position in international marine and energy (M&E) through its 57.9 percent controlling stake in Gard M&E.
“In addition, the ratings reflect the group’s very strong capitalization and reserving, and the significant benefits of Gard P&I’s marine mutual structure. The ratings on Gard M&E also benefit from the club’s strategic importance to Gard P&I.”
S&P noted, however, that “partially offsetting these strengths, operating performance can be volatile, both in the P&I and the M&E sectors. Gard M&E also has the disadvantage of lacking a stable track record of ownership and earnings.”
S&P credit analyst Peter McClean observed that the stable outlook on the Gard group reflects the rating agency’s “expectation that assimilation of Gard M&E will be completed satisfactorily during 2005, strengthening the competitive position of the Gard group by cross-selling to Gard P&I members.”
S&P also said it expects the group’s operating performance “to show considerable improvement, with the combined ratio for the P&I business reaching an optimum level for the cycle of about 95 percent in 2005, and remaining within tolerances for a mutual at just over 100 percent in 2006. On a consolidated basis, a combined ratio of about 100 percent is expected in both years.”
“Risk-based capitalization across both the P&I and M&E operations is expected to be maintained at very strong levels,” McClean concluded.
Was this article valuable?
Here are more articles you may enjoy.
Insurers Begin Restricting Privacy Coverage in Response to Evolving Risk 
Florida Appeals Court Reverses $200M Jury Verdict in Maya Kowalski Case 
Brown & Brown Reports Strong Q3 Revenue Growth of 35.4% 
Catastrophe Bond Investors Told to Brace for Jamaica Payout 
