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A. M. Best Affirms Ratings of Transmonde Services Insurance Company Limited CONTACTS:
FOR IMMEDIATE RELEASE OLDWICK, NEW JERSEY, U.S.A., Mar. 2, 2010—A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of Transmonde Services Insurance Company Limited (Transmonde) (Bermuda). The outlook for both ratings is stable. The ratings of Transmonde reflect its minimal underwriting
leverage, strong level of capitalization and profitable operating results
driven by its excellent underwriting performance. Partially offsetting
these positive rating factors are the company’s relatively 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 subsidiaries and affiliates of its publicly traded Swiss parent, SGS
Group Transmonde has maintained very conservative underwriting leverage ratios as surplus has consistently grown to support increasing business volumes. This surplus growth is due to the retained earnings from highly profitable operating results, which are driven by the company’s excellent underwriting performance. Transmonde has posted low loss and loss adjustment expense ratios, reflecting SGS Group’s effective risk management. Transmonde’s relatively high per occurrence retentions are mitigated by significant deductibles, conservative reserving practices and minimal exposure to pollution losses. SGS Group has no manufacturing or trading interests to contribute to pollution exposure. In 2004, Transmonde entered into loan facility agreements to provide substantial funds to its parent in the form of loans. Concerns regarding liquidity at Transmonde are mitigated in part by a favorable termination provision. Transmonde also benefits from the strong balance sheet and financial flexibility of SGS Group. A.M. Best remains the leading rating agency of captive insurers rating a wide variety of more than 200 captives in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative insurance market, please visit www.ambest.com/captive. The principal methodologies used in determining these ratings, including any additional methodologies and factors, which may have been considered, can be found at www.ambest.com/ratings/methodology. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. ### |
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