The Steamship Mutual Underwriting Association (Bermuda) Ltd. has been affirmed the financial strength rating of B++ (good) and issuer credit rating of "bbb+" by AM Best Co.

The outlook for both ratings remains stable.

The ratings reflect Best's expectation that the Association will maintain good risk-adjusted capitalisation at year-end February 2008, although prospectively it remains exposed to potential earnings volatility from both underwriting and investment results.

While Best anticipates some improvement in performance for the year ending February 2008 supported by a significant reserve release, underwriting losses are expected to continue.

As a member of the International Group of P&I Clubs, Steamship Bermuda continues to be exposed to instability in technical results caused by a period of historically high claims in the group's pooling layer. Additionally, the Association's investment returns are likely to remain volatile due to relatively high exposure to equities and hedge funds (fund of funds portfolio), despite an anticipated reduction in equity exposure to approximately 20 percent of total invested assets at year-end February 2008.

In Best's opinion, Steamship Bermuda's membership of the International Group is essential for it to maintain its current business position and market profile.