A.M. Best Affirms Rating of Sunderland Marine Mutual Insurance Company.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Sept. 23, 2003 A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) of Sunderland Marine Mutual Insurance Company Limited (SMMI SMMI Salesian Missionaries of Mary Immaculate SMMI Single Man Machine Interface SMMI Synchronous Main Memory Interface ), United Kingdom. The outlook is stable. The rating reflects the company's excellent capital position on a risk-adjusted basis, significantly improved operating performance and very good niche business profile. Offsetting factors include the company's relatively high reliance on reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. protection. Excellent capitalisation--On a risk-adjusted basis, surplus remains excellent as measured by A.M. Best's risk-based capital model. SMMI benefited from a return to profitability during 2002 such that surplus was boosted by retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. . This is forecast to continue in the near-term. Improved operating performance--SMMI achieved underwriting and bottom line profits in the most recent year--GBP 0.3 million (USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 0.4 million) and GBP GBP In currencies, this is the abbreviation for the British Pound. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 2.0 million (USD 3.2 million), respectively--after two years of substantial net losses. The implementation of various underwriting and operational measures led to an improved combined ratio of 97.6% at year-end 2002. In addition, the company's operating performance benefited from the divestment of all equity exposure executed in 2001. A.M. Best expects further improvements in operating performance for 2003. Very good business profile--SMMI is a leading niche insurer of fishing, charter and small commercial vessels (81.3% of gross premiums in 2002) and aquaculture aquaculture, the raising and harvesting of fresh- and saltwater plants and animals. The most economically important form of aquaculture is fish farming, an industry that accounts for an ever increasing share of world fisheries production. (18.7%), a sector in which it has developed specialised risk management techniques. The company has constructed a geographically well-diversified portfolio Well-diversified portfolio A portfolio that includes a variety of securities so that the weight of any security is small. The risk of a well-diversified portfolio closely approximates the systematic risk of the overall market, and the unsystematic risk of each security has been and has underwriting operations in the UK and the Netherlands and branch offices in Australia, Canada, New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. and North America. Relative high reliance on reinsurance protection--SMMI cedes a relatively high proportion (33.8% in 2002) of its gross premiums mainly driven by its marine business protection (22%). The company aims to maintain its overall protection as cost effectively as possible, and for the 2002 and 2003 programmes, it has actively revised and modified terms and conditions to offset the effect of escalating reinsurance costs. However, there are some limitations to the extent of changes that can be made whilst adequately controlling exposures. Market conditions will dictate future reinsurance costs, and A.M Best will closely monitor how this might impact SMMI. However, SMMI's management does not expect any material increase in reinsurance cost for 2004. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion