In a separate bulletin Standard & Poor’s Ratings Services announced that it has affirmed its “A” counterparty credit and insurer financial strength ratings on The Standard Steamship Owners’ P&I Association (Bermuda) Ltd. (SB or the club). (See also previous article).
S&P also noted that through applicable guarantees the “A” ratings of the Bermuda parent also apply to The Standard Steamship Owners’ P&I Association (Europe) Ltd. and The Standard Steamship Owners’ P&I Association (Asia) Ltd.
The outlook on all of the ratings is stable.
“The ratings are based on SB’s very strong financial flexibility, strong capitalization, and strong competitive position,” stated S&P credit analyst Lucy Stupples. “Offsetting these strengths are SB’s no more than adequate underwriting results and market-driven investment returns, which have led to volatility in the earnings and free reserves.”
S&P said the stable outlook reflects its view that “SB’s competitive position will remain strong, with the club continuing to be regarded as one of the ‘big four’ P&I clubs. Capitalization is expected to remain stable for the year to February 2005. The capital adequacy ratio will continue to be more than supportive of the rating. Underwriting performance is not expected to show a surplus by year-end February 2005; however, the underwriting deficit is expected to reduce by approximately one-half. Significant improvement in the combined ratio is expected with the ratio for February 2005 not exceeding 110 percent.”
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