A.M. Best Affirms Credit Ratings Of Transmonde

October 8, 2018

A.M. Best has affirmed the Financial Strength Rating of A [Excellent] and the Long-Term Issuer Credit Rating of “a” of Transmonde Services Insurance Company Limited [Transmonde] [Hamilton, Bermuda]. The outlook of these Credit Ratings [ratings] remains stable.

A statement from the ratings agency said, “The ratings reflect Transmonde’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

“Partially offsetting these rating factors are Transmonde’s high retentions and concentration in liability lines with significant loss severity potential, and its limited market profile as a single parent captive. Transmonde provides professional, general and pollution liability coverages to members of the International Association of Superintendents, which are subsidiaries of SGS SA [SGS], a publicly traded Swiss company [SWX: SGSN].

“Transmonde has maintained very conservative underwriting leverage ratios, as surplus has remained strong to support its business volumes. Historically, surplus growth is the result of retained earnings from highly profitable operating results driven by excellent underwriting performance. The company has posted low loss and loss adjustment expense ratios, which reflect SGS’s effective risk management. Its relatively high per-occurrence retentions are mitigated by significant deductibles and conservative reserving practices.

“While the rating outlooks are stable, factors that could lead to positive rating actions include a material increase in Transmonde’s risk-adjusted capitalization and consistently favorable operating results at SGS S.A. Factors that may lead to negative rating actions include sustained adverse global economic conditions affecting SGS S.A. and Transmonde, material loss of risk-adjusted capitalization, deterioration of operating performance or an increase in net retention.”

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