Best’s News & Research Service - April 28, 2016 09:27 AM (EDT)
A.M. Best Affirms Ratings of Samsung Fire & Marine Insurance Company of Europe Limited
- April 28, 2016 09:27 AM (EDT)
London //BestWire// - A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a” of Samsung Fire & Marine Insurance Company of Europe Limited (SFME) (United Kingdom). The outlook for each rating is stable.
The ratings of SFME reflect its excellent risk-adjusted capitalisation and strong operating performance. In addition, the ratings factor in the significant support it receives from its parent, Samsung Fire & Marine Insurance Co. Ltd. (SFMI) (South Korea), which provided SFME’s initial capital of GBP 10.6 million in 2011. SFMI provides substantial reinsurance protection to SFME on a facultative basis and through participation in surplus share and per risk excess of loss treaties.
As a small company writing large risks, SFME is highly dependent on reinsurance. Although the risks associated with this dependence are mitigated by the good credit quality of the company’s reinsurers, it is an offsetting factor for the ratings.
After a partial initial year and four full years of trading, SFME is building a track record of excellent operating performance, with an average combined ratio of 72%, in spite of reporting a marginal profit before tax of GBP 0.7 million in 2015. The main driver of this result was a 28% reduction in gross written premium compared with 2014, arising from pressure on rates and lower insured values of cargo shipped by the company’s clients, and higher incurred claims on a calendar-year basis.
In 2015, the majority of SFME’s business was generated from insuring Samsung group operations in Europe. In addition, SFME insured a small amount of third-party Korean risks within Europe and locally sourced business. A.M. Best expects portfolio diversification to continue over the coming years, as SFME expands its external business. As a subsidiary of SFMI and part of the Samsung group, a South Korean conglomerate, SFME benefits from an excellent business profile within its target markets.
This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page.
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