Best Affirms BNY Trade Ratings
A.M. Best Co. has today [Oct. 20] affirmed the financial strength rating of ‘A’ [Excellent] and issuer credit rating of “a” of Bermuda-based BNY Trade Insurance, Ltd., both with stable outlooks.
The ratings reflect BNY Trade’s “strong capitalisation, consistently positive operating results, conservative operating strategy and robust enterprise risk management (ERM) framework as it follows its parent, The Bank of New York Mellon Corporation’s practices,” ratings agency Best explained. The ratings also recognise BNY Trade’s “excellent business position, as it has close ties to and is a wholly owned subsidiary of BNY Mellon, a leading global financial services company.”
As partial offsetting factors Best cited BNY Trade’s “limited market scope, product mix and dependence on third parties for processing, servicing and administration. An additional offsetting rating factor is BNY Trade’s large underwriting exposure as it offers high gross insurance limits and insures excess bankers’ professional liabilities with substantial insured values.
BNY Trade provides comprehensive reinsurance/insurance coverages/products to BNY Mellon.” Best explained that the company’s reinsurance “is placed with the world’s significant providers, and it benefits from BNY Mellon’s significant financial resources, extensive risk mitigation and the safety programs implemented throughout the organisation.
As BNY Trade fully cedes assumed risk under primary bankers’ professional coverages and an all risk property policy to the commercial market, the company’s exposure to net underwriting losses is minimal.
BNY Trade’s projected operating results indicate favorable returns, and its surplus base of over $95 million is more than adequate to support the company’s asset and credit risk exposure.
While BNY Trade’s excess bankers’ professional program and the property coverages written offer significant insured values — considering the high coverage limits offered — the net impact could be burdensome.”
Best concluded that it nevertheless “recognizes the low probability of such events.”
