A.M. Best Co. announced that it has affirmed the “A” (Excellent) financial strength rating of West of Luxembourg-based England Ship Owners Mutual Association (WOE) with a stable outlook.
Best said it “regards WOE’s risk-adjusted capitalisation as excellent and believes this position is likely to be maintained through a steady increase in retained surplus.” The rating agency also indicated that it “anticipates that retained surplus will increase by 12.5 percent for the year-ending February 2005 to approximately $164 million, driven by very good operating profits of approximately $18 million for the year.”
Best also anticipates that WOE’s performance will improve for the same period, with a prospective loss ratio of approximately 85 percent—down from 109.3 percent in 2004—after substantial rate increases and the termination of relationships with poorly performing members. “Although A.M. Best believes this improvement in underwriting performance is sustainable, WOE is likely to remain reliant on investment returns, estimated at approximately $30 million for year-end February 2005, to maintain profitability,” said the bulletin.
Best said it “believes WOE has a solid business position, market profile and brand within the P&I market, enhanced by its strong position within the International Group of Protection & Indemnity Clubs. WOE is likely to rank as the third largest member of the International Group at year-end February 2005, with estimated premium income of $209 million.”
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