OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of Transmonde Services Insurance Company Limited (Transmonde) (Hamilton, Bermuda). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Transmonde’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
Partially offsetting these rating factors are Transmonde’s high retentions and concentration in liability lines with significant loss severity potential, although the company has experienced historically favorable loss experience. Additional offsetting factors include the limited market profile as a single-parent captive that derives all its business from its parent company, SGS SA (SGS) [SWX: SGSN], a publicly traded Swiss company. Transmonde provides professional, property, cyber, general and pollution liability coverages to subsidiaries of SGS.
Transmonde has maintained very conservative underwriting leverage ratios, as surplus has remained strong to support its business volumes. Historically, surplus growth is the result of retained earnings from highly profitable operating results driven by excellent underwriting performance. Transmonde has a history of conservatively distributing excess capital back to SGS.
The company has posted low loss and loss adjustment ratios, which reflect SGS’ robust and effective risk management. Its relatively high per-occurrence retentions are mitigated by significant deductibles and conservative reserving practices.
AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.
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