Press Release - JUNE 10, 2016
A.M. Best Assigns Ratings to SUMIT Insurance Company Ltd
FOR IMMEDIATE RELEASE
OLDWICK - JUNE 10, 2016
SUMIT is a Bermuda-domiciled captive insurance company organized as a segregated accounts company. It is wholly owned by Stanford Health Care and Lucile Packard Children’s Hospital Stanford within the Stanford University organization. SUMIT provides medical professional liability (MPL) coverage, hospital professional liability, general liability, miscellaneous error and omissions insurance and managed care liability for Stanford Health Care, Lucile Packard Children’s Hospital and Stanford Children’s Health, the Stanford University School of Medicine and more than 2,500 of its faculty physicians.
The ratings reflect SUMIT’s strong consolidated capitalization, focused business strategy and beneficial legal structure. The ratings also consider the company`s strategic role as part of Stanford Health Care/ Lucile Packard Children’s Hospital and Stanford Children’s Health, as well as the excellent performance of its operations and enterprise risk management. Partially offsetting these positive rating factors are the company’s concentration of underwriting risk in MPL lines in California and volatility in its earnings and reserve development. In addition, SUMIT’s retentions are high relative to its surplus and its smaller segregated cells are minimally capitalized.
Positive rating actions could occur if the company continues to demonstrate exceptional positive earnings performance with lower volatility while maintaining its strong capital adequacy. Negative rating impact could occur if underwriting performance shows decline and demonstrates volatility that impacts earnings and capitalization negatively over time or if there is a material shift in SUMIT’s risk profile that could potentially undermine the stability and profitability of the company. Financial issues resulting in ratings pressure on SUMIT’s parents also could adversely impact the company’s ratings.
A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.
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.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.