8 April 2013Bermuda analysis

Transmonde Services upgraded by AM Best

A.M. Best announced that Bermuda-domiciled Transmonde Services Insurance Company, a captive of the International Association of Superintendents (itself a subsidiary of Swiss Company SGS SA), has been upgraded to a financial strength rating of A (Excellent) from A-. Their issuer credit rating has also been upgraded to “a” from “a-“. The outlook for both ratings is stable.

According to A.M. Best, the rating upgrades are based on the captive’s historical operating performance, excellent risk-adjusted capitalization and minimal underwriting leverage, which have allowed Transmonde to enhance its surplus considerably in recent years.

Offsetting the positive rating factors are relatively high retentions and concentration in liability lines, along with Transmonde’s limited market profile as a single parent captive.

The rating agency said: “while A.M. Best believes Transmonde is well positioned at its current rating level, 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.”