S&P Raises Sunderland Marine Ratings to ‘BBB+’

May 11, 2005

Standard & Poor’s Ratings Services announced that it has raised its long-term counterparty credit and insurer financial strength ratings on U.K.-based insurer Sunderland Marine Mutual Insurance Co. Ltd. (SMMI) and its long-term insurer financial strength rating on Sunderland Marine Mutual Insurance Co. Ltd. (New Zealand Branch) to “BBB+” from “BBB.” The outlook is stable.

“The upgrade reflects the continuing improvement in SMMI’s operating performance, which has in turn led to further strengthening of its free reserves,” stated S&P credit analyst Lucy Stupples.

S&P also indicated that the ratings “factor in SMMI’s strong capitalization and competitive position, which is good overall and strong within its niche segment of the marine insurance market. The ratings are constrained, however, by SMMI’s current focus on two economically volatile sectors–the fishing and fish-farming industries–and by the small size of its capital base in absolute terms.”

S&P said it “expects that SMMI will be able to sustain its good operating performance throughout 2005/2006. As a result, free reserves are expected to steadily increase, thereby reinforcing the capital position. The capital adequacy ratio will continue to be more than supportive of the ratings. SMMI’s competitive position is expected to remain strong within its niche market as the company takes advantage of improving conditions within the aquaculture industry and remains a leading player in its core markets.

“Investment risk will remain moderate as SMMI begins to diversify its investment portfolio. Equities will remain at a maximum of 30 percent of free reserves, and are not expected to place any strain upon the future financial strength of the company.”

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