Press Release - SEPTEMBER 13, 2017
A.M. Best Affirms Credit Ratings of Starr International (Europe) Limited
| ||David Drummond|
Senior Financial Analyst
+44 20 7397 0327
+44 20 7397 0266
Manager, Public Relations
+1 908 439 2200, ext. 5159
Director, Public Relations
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FOR IMMEDIATE RELEASE
LONDON - SEPTEMBER 13, 2017
A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of Starr International (Europe) Limited (SIEL) (United Kingdom). The outlook of these Credit Ratings (ratings) remains stable.
The ratings of SIEL reflect its excellent risk-adjusted capitalisation, good initial and prospective operating performance and good business profile as a subsidiary of Starr Insurance & Reinsurance Limited (SIRL), which is a subsidiary of Starr International Company, Inc. SIEL receives explicit support from SIRL in the form of a capital maintenance agreement.
An offsetting rating factor is SIEL’s reliance on reinsurance, with a premium retention ratio of approximately 20%.
SIEL commenced underwriting in the third quarter of 2016, primarily renewing business previously written by the existing London branch of SIRL. The new company was provided with USD 100 million of capital by SIRL, thereby ensuring an excellent level of risk-adjusted capitalisation for the immediate future.
In 2016, SIEL reported a solid operating performance for its first few months of operation, with a pre-tax profit of GBP 7.6 million. This result was driven by an underwriting profit of GBP 4.5 million bolstered by a strong investment return, in spite of SIEL’s conservative investment portfolio and the low interest rate environment. A.M. Best expects SIEL’s prospective operating performance to be good, with a commensurate result likely in 2017, SIEL’s first full year. Earnings are expected to be underpinned by solid underwriting profits, boosted by reinsurance commission and modest investment income. Potential volatility is expected to be reduced by the quota share and other reinsurance arrangements in place.
SIEL benefits from a good business profile as a member of the Starr International Insurance group, a global group providing property, casualty, and accident & health insurance products, as well as a range of specialty coverages including aviation, marine, energy and excess casualty insurance. SIEL’s business profile is expected to build on the market presence with insurance brokers established by the London branch of the Starr International Insurance group, which began operations in 2010. The branch has now ceased underwriting and its business is being renewed into SIEL.
This press release relates to Credit Ratings 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. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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