Best Affirms Sunderland Marine Mutual ‘A-‘ Rating

May 18, 2005

A.M. Best Co. announced that it has affirmed the financial strength rating of “A-” (Excellent) of the U.K.’s Sunderland Marine Mutual Insurance Company Ltd. (SMMI) (United Kingdom) with a stable outlook.

“A.M. Best anticipates continued improvement in SMMI’s risk-adjusted capitalization at year-end 2005,said the bulletin. Best expects that retained surplus will increase free reserves over 15 percent to approximately £42 million ($78 million) in 2005, which will more than offset forecast premium growth of less than 2 percent according to the rating agency’s risk-based analysis. In addition, Best said it “believes that SMMI’s capital remains strongly protected by its reinsurance programme, which provides cover to a level above the company’s probable maximum loss.”

Best said that although it “foresees softening rates in SMMI’s specialist markets in 2005, it anticipates that the company’s selective underwriting approach and leadership position in the fishing vessels, inland/coastal vessels and aquaculture sectors are likely to support a combined ratio below 95 percent. A combined ratio of approximately 90 percent was achieved in 2004 as a result of a better than anticipated claims environment, particularly for SMMI’s aquaculture business.”

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