AM Best has assigned a financial strength rating (FSA) of A (Excellent) to SUMIT Insurance Company (Hamilton, Bermuda).
The outlook assigned to the rating is stable.
SUMIT is a Bermuda-domiciled captive insurance company organised as a segregated accounts company. It is wholly owned by Stanford Health Care and Lucile Packard Children’s Hospital Stanford within the Stanford University organisation.
SUMIT provides medical professional liability (MPL) coverage, hospital professional liability, general liability, miscellaneous error and omissions insurance and managed care liability for Stanford Health Care, Lucile Packard Children’s Hospital and Stanford Children’s Health, the Stanford University School of Medicine and more than 2,500 of its faculty physicians.
The rating reflects SUMIT’s strong consolidated capitalisation, according to AM Best, as well as its focused business strategy and beneficial legal structure. The ratings also consider the company`s strategic role as part of Stanford Health Care/ Lucile Packard Children’s Hospital and Stanford Children’s Health, as well as the excellent performance of its operations and enterprise risk management.
Partially offsetting these positive rating factors are the company's concentration of underwriting risk in MPL lines in California and volatility in its earnings and reserve development. In addition, SUMIT’s retentions are high relative to its surplus and its smaller segregated cells are minimally capitalised.
Positive rating actions could occur if the company continues to demonstrate exceptional positive earnings performance with lower volatility while maintaining its strong capital adequacy. Negative rating impact could occur if underwriting performance shows decline and demonstrates volatility that impacts earnings and capitalisation negatively over time or if there is a material shift in SUMIT’s risk profile that could potentially undermine the stability and profitability of the company, said AM Best.
Financial issues resulting in ratings pressure on SUMIT’s parents also could adversely impact the company's ratings.
AM Best, Ratings, SUMIT Insurance Company, Bermuda