Superintendents’ captive insurer has credit ratings affirmed
Bermuda-based captive insurance company Transmonde Services Insurance Company Ltd has had its financial strength rating of A affirmed by the ratings agency AM Best.
AM Best has also affirmed Transmonde’s long-term issuer credit rating of “a” and said the outlook of the ratings is stable.
Transmonde, which was formed in 1978 and provides liability coverages to members of the International Association of Superintendents, which are subsidiaries of SGS SA, a publicly traded Swiss company, was praised for its very strong balance sheet, strong operating performance, limited business profile and appropriate enterprise risk management.
SGS SA provides inspection, verification, testing, certification and quality assurance services in Europe, Africa, the Middle East, the Americas and the Asia Pacific.
But AM Best added: “Partially offsetting these rating factors are Transmonde’s high retentions and concentration in liability lines with significant loss severity potential, although the company has experienced historically favourable loss experience.
“Additional offsetting factors include the limited market profile as a single-parent captive that derives all its business from its parent company.”
Best said its underwriting was conservative and its highly profitable operating results were driven by this.
It added: “While the rating outlooks are stable, factors that could lead to negative rating action include a material deterioration of risk-adjusted capitalisation or operating performance, decreased strategic importance to the group, or high dividend demands from the parent company depleting capital.”