Press Release - MAY 19, 2017
A.M. Best Withdraws Credit Ratings of The Shipowners’ Mutual Protection and Indemnity Association (Luxembourg)
FOR IMMEDIATE RELEASE
LONDON - MAY 19, 2017
The ratings reflect the Club’s excellent risk-adjusted capitalisation, specialist business profile, providing protection and indemnity (P&I) insurance to owners of small ships, and generally strong operating performance, backed by enhanced risk management processes.
The revision of the outlooks to stable from positive follows underwriting and operating performances below A.M. Best’s expectations to support a higher rating level in each of the last three accounting periods. In 2014, when the outlooks were revised to positive from stable, the revision reflected three years of strong operating performances that had increased the Club’s free reserves to nearly USD 300 million from USD 188 million in February 2011. However, substantial foreign exchange and unrealised investment losses had a significant negative impact on the operating performance for the following two accounting periods, resulting in a marginal operating profit in the year to 20 February 2015 and an operating loss after tax of USD 21 million at the Club’s new accounting date of 31 December 2015. At the same time, difficult market conditions have adversely affected underwriting performance in the last two years, with combined ratios in excess of 98% reported. Although a stronger investment return for the year to 31 December 2016 led to an operating profit of USD 14.6 million, free reserves at that date remained below their February 2014 level.
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.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.