AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of "a+" (Excellent) of Samsung Fire Marine Insurance Company of Europe Limited (SFME) (United Kingdom). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect SFME'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. The ratings also factor in both implicit and explicit support from SFME's parent, Samsung Fire Marine Insurance Co., Ltd (SFMI).
SFME's balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR). The balance sheet strength assessment benefits from a conservative investment portfolio and prudent reserving practices, as demonstrated by a track record of favourable reserve development. Offsetting factors include the company's relatively small capital base in absolute terms and its high reinsurance dependence for underwriting large limit risks. However, the potential elevated credit risk from a large loss is partially mitigated through the use of a strong and stable reinsurance panel. Prospectively, AM Best expects SFME to maintain a level of capital adequacy that is supportive of the very strong balance sheet strength assessment.
SFME has a track record of strong operating performance, demonstrated by a five-year weighted average (2016-2020) return-on-equity ratio of 11.7%. Earnings are underpinned by robust, albeit volatile, underwriting performance, demonstrated by a combined ratio that has fluctuated between 45.8% and 94.8% over the past five years. Investment income accounts for a small component of overall earnings.
The business profile assessment of limited reflects SFME's small scale and concentration toward property and cargo business. Currently, the majority of the company's revenue is generated by insuring Samsung group risks across the United Kingdom, Europe, Central Asia, Middle East and Africa. As a subsidiary of SFMI and part of the Samsung group, SFME benefits from the business profile of the wider group. This association is expected to support its strategy to grow locally sourced third-party business over the medium-to-long term.
This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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