CONTACTS:
FOR IMMEDIATE RELEASE
LONDON - OCTOBER 06, 2017 11:24 AM (EDT)
A.M. Best has affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” of SCHWARZMEER UND OSTSEE Versicherungs-Aktiengesellschaft (SOVAG) (Germany). The outlook of these Credit Ratings (ratings) remains negative. Concurrently, A.M. Best has withdrawn the ratings at the company’s request to no longer participate in A.M. Best’s interactive rating process.
The ratings reflect SOVAG’s adequate risk-adjusted capitalisation, which is supportive of its current business strategy. An offsetting rating factor is the potential impact of expense strain on the company’s capital position.
SOVAG ceased writing all lines of business at the beginning of 2017. The company’s current risk-adjusted capitalisation is regarded as adequate, supported by a capital injection of EUR 10 million in February 2017 from its shareholders and a decline in underwriting risk due to its decision to cease writing new business. Additionally, SOVAG continues to benefit from a comprehensive reinsurance programme and a strong liquidity profile. Prospective earnings are likely to be affected by substantial expense strain associated with the management of its historical business, which will be only marginally offset by modest investment income. The company is exploring efficient solutions to manage this expense.
The negative outlooks reflect A.M. Best’s considerable uncertainty with regard to SOVAG’s ability to maintain its current level of solid risk-adjusted capitalisation.
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.