AM Best has affirmed the A (Excellent) financial rating of Bermuda-based Transmonde Services Insurance Company, citing strong operating performance and excellent risk-adjusted capitalisation.
Transmonde provides professional, general and pollution liability coverages to members of the International Association of Superintendents, which is a subsidiary of SGS, a publicly traded Swiss company.
The rating agency commended the captive’s ability to generate net underwriting income and net income in recent years, which have helped to enhance the company’s surplus in recent years.
AM Best said that relatively high retentions and concentration in liability lines with significant loss severity potential offset some of these positive factors.
The rating agency reports that Transmonde has maintained very conservative underwriting leverage ratios as surplus has consistently grown to support its business volumes. Transmonde’s relatively high per occurrence retentions are mitigated by significant deductibles and conservative reserving practices.
A.M. Best said that it believes Transmonde is well positioned at its current rating level, but added that factors that may lead to negative rating actions include unfavourable operating profitability trends, outsized investment losses and a significant decline in its risk-adjusted capital that would not be supportive of its current rating level.