A.M. Best Affirms Rating of Sunderland Marine Mutual Insurance Company Limited; Assigns Issuer Credit Rating.
In A.M. Best's opinion, SMMI's risk-adjusted capitalisation remains excellent and sufficient to support the company's future anticipated business volume. SMMI's retained surplus in 2005 increased free reserves by GBP 8.5 million (USD 16.2 million) to GBP 43.8 million (USD 83.2 million). A.M. Best believes this growth will continue in 2006, bringing total free reserves to approximately GBP 51 million (USD 96.9 million) at year-end.
A.M. Best anticipates strong earnings from SMMI in 2006, although further ahead, softening in the marine market is likely to affect performance. SMMI is likely to produce a combined ratio near 90% and a post tax result of approximately GBP 9 million (USD 17.1 million) for 2006 before charging goodwill and other associated costs relating to the acquisition of its management company. After charging these costs, the anticipated addition to free reserves from retained surplus is GBP 7 million (USD 13.3 million), down from GBP 9 million (USD 17.1 million) in 2005, resulting from a continuation of good claims experience and firm rates.
A.M. Best believes that SMMI maintains a strong business profile in its niche sectors, which comprise fishing vessels, inland/coastal vessels and aquaculture. The company writes business through its network of international branches, giving it a geographically well-diversified portfolio of business. SMMI further enhances its business profile through the use of its technical expertise and, in respect of aquaculture business, its in-house risk manager, Aquaculture Risk Management Company.
For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.
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.
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|Date:||Nov 20, 2006|
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