LONDON--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of Samsung Fire & Marine Insurance Company of Europe, Limited (SFME) (United Kingdom). The outlook of these Credit Ratings (ratings) is stable.
The ratings of SFME reflect its excellent risk-adjusted capitalisation and strong operating performance. In addition, the ratings factor in the significant support it receives from its parent, Samsung Fire & Marine Insurance Co., Ltd. (SFMI), which provided SFME’s initial capital of GBP 10.6 million in 2011. SFMI provides substantial reinsurance protection to SFME on a facultative basis.
As a small company writing large risks, SFME is highly dependent on reinsurance. Although the risks associated with this dependence are mitigated by the good credit quality of the company’s reinsurers, it is an offsetting factor for the ratings.
After a partial initial year and five full years of trading, SFME has built a track record of excellent operating performance, with a 5-year average combined ratio below 75%. Gross written premiums increased by 18% in 2016, partially reversing a 28% reduction in 2015, and in spite of a substantial increase in claims, the company reported a profit before tax of GBP 1.9 million.
Although diversification improved in 2016, the majority of SFME’s business was again generated from insuring Samsung group operations in Europe. In addition, SFME insured a small amount of third-party Korean risks within Europe and an increased amount of locally sourced business. A.M. Best expects portfolio diversification to continue over the coming years, as SFME continues to expand its external business. As a subsidiary of SFMI and part of the Samsung group, a South Korean conglomerate, SFME benefits from an excellent business profile within its target markets.
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