A.M. Best Places Ratings of Sunderland Marine Mutual Insurance Company Limited Under Review With Developing Implications

LONDON--()--A.M. Best Europe – Rating Services Limited has placed under review with developing implications the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of Sunderland Marine Mutual Insurance Company Limited (SMMI) (United Kingdom), following the announcement that the company is entering into a merger framework agreement with The North of England Protecting and Indemnity Association Limited (NEPIA) (United Kingdom). The agreement is intended to form the basis of a merger between the two companies, subject to approval by their respective members and satisfaction of various merger conditions, principally regulatory approval by the UK and certain overseas regulators.

NEPIA is one of the world’s largest marine mutual liability insurers, providing liability insurance to its 330 ship-owning members worldwide for coverage on approximately 5,000 ships. The company is based in Newcastle upon Tyne and is a member of the International Group of Protection and Indemnity Clubs.

Since January 2012, NEPIA has provided SMMI with quota share reinsurance as part of a strategic alliance between the two companies. It was announced in August 2013 that the companies were in talks that could lead to a merger.

The under review with developing implications status reflects A.M. Best’s view that, although SMMI is expected to benefit from being a part of a larger organisation with access to additional financial and managerial resources, on completion of the merger A.M. Best will need to assess the transaction’s likely effect on SMMI’s operating performance and risk-adjusted capitalisation. The ratings will remain under review pending the completion of the merger, A.M. Best’s further analysis and discussions with management regarding SMMI’s strategic fit within NEPIA.

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.

A.M. Best Europe – Rating Services Limited is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contacts

A.M. Best Company
David Drummond, +(44) 20 7397 0327
Senior Financial Analyst
david.drummond@ambest.com
or
Mathilde Jakobsen, +(44) 20 7397 0266
Associate Director, Analytics
mathilde.jakobsen@ambest.com
or
Rachelle Morrow, +(1) 908-439-2200, ext. 5378
Senior Manager, Public Relations
rachelle.morrow@ambest.com
or
Jim Peavy, +(1) 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

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Contacts

A.M. Best Company
David Drummond, +(44) 20 7397 0327
Senior Financial Analyst
david.drummond@ambest.com
or
Mathilde Jakobsen, +(44) 20 7397 0266
Associate Director, Analytics
mathilde.jakobsen@ambest.com
or
Rachelle Morrow, +(1) 908-439-2200, ext. 5378
Senior Manager, Public Relations
rachelle.morrow@ambest.com
or
Jim Peavy, +(1) 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com