A.M. Best Assigns ‘A’ Rating to Starr International (Europe) Ltd.

August 8, 2016

A.M. Best has assigned a financial strength rating of “A” (Excellent) and an issuer credit rating of “a” to UK-based Starr International (Europe) Ltd. (SIEL). The outlook assigned to each rating is stable.

The ratings of SIEL reflect its excellent risk-adjusted capitalization, the expectation of good prospective operating performance and its good business profile as a subsidiary of Starr Insurance & Reinsurance Ltd. (SIRL), which is itself a subsidiary of Starr International Co. Inc., said A.M. Best, noting that SIEL receives explicit support from its parent company in the form of a capital maintenance agreement.

An offsetting rating factor is SIEL’s reliance on reinsurance, with the company expecting premium retention to be approximately 30 percent, said the ratings agency.

“In March 2016, the UK insurance regulator, the Prudential Regulation Authority, authorized SIEL to write non-life insurance, enabling it to write business previously written by the existing London branch of SIRL with effect from July 1, 2016,” A.M. Best continued.

The new company received US$100 million of capital from SIRL, “thereby ensuring an excellent level of risk-adjusted capitalization for the immediate future,” A.M. Best said.

The ratings agency expects SIEL’s prospective operating performance to be good, with earnings underpinned by solid underwriting profits, boosted by reinsurance commission and modest investment income, a reflection of SIEL’s conservative investment portfolio and the low interest rate environment. Potential volatility will be reduced by quota share and other reinsurance arrangements, A.M. Best said.

“SIEL is likely to benefit from a good business profile as a member of the Starr International Insurance group, a global group providing property, casualty, and accident & health insurance products, as well as a range of specialty coverages including aviation, marine, energy and excess casualty insurance,” said A.M. Best.

The London branch of the Starr International Insurance group has been operating since 2010, and in 2015 it led on almost 40 percent of risks written, the ratings agency said. “With nearly all of its business written on a direct and facultative basis, SIEL has an established market presence with insurance brokers,” it added.

Source: A.M. Best

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