Standard & Poor’s Ratings Services has affirmed its “BBB” long-term counterparty credit and insurer financial strength ratings on Oslo-based non-life insurer Bluewater Insurance ASA. S&P also removed the ratings from CreditWatch, where they had been placed with negative implications on Feb. 2, 2007 (See IJ web site Feb. 5). The outlook is now stable.
“The resolution of the CreditWatch placement follows today’s announcement by Bluewater that it does not intend to proceed with its planned acquisition of Sweden-based insurer Tennant Insurance Group AB,” stated S&P credit analyst Peter McClean. “Consequently, our concerns regarding the possible implications of the proposed transaction for the ratings on Bluewater no longer apply.”
S&P also noted: “The ratings on Bluewater continue to reflect the positive track record of the company’s management team, strong capitalization, good operating performance, and good competitive position. These strengths are offset, however, by the potential volatility of future earnings, the small size of Bluewater’s capital base in absolute terms, and the challenges inherent in building a sustainable competitive position in the nonmarine sector.
“The stable outlook reflects Standard & Poor’s expectations that capital adequacy will remain at an extremely strong level and that Bluewater’s entry into selected lines of nonmarine business will not undermine the management team’s core competency in marine business. Over the medium term, should Bluewater prove capable of establishing a sustainable competitive position in nonmarine business, this may justify an upgrade. Any significant and sustained deterioration in earnings may cause the ratings to be lowered.”
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