LONDON, August 11, 2022--(BUSINESS WIRE)--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 implicit and explicit support from SFME’s parent, Samsung Fire & Marine Insurance Co., Ltd. (SFMI).
SFME’s balance sheet strength is underpinned by its 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 dependence on reinsurance to underwrite large limit risks. The potential elevated credit risk from a large loss is mitigated partially through the use of a strong reinsurance panel.
SFME has a track record of strong operating performance, demonstrated by a five-year weighted average (2017-2021) return-on-equity ratio of 11.7%. Earnings are underpinned by robust, and somewhat volatile, underwriting performance, demonstrated by a combined ratio that has fluctuated between 45.8% and 77.4% over the past five years. Investment income modestly contributes to SFME’s overall earnings, reflecting the conservative nature of its portfolio.
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 gradually 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 Performance Assessments, 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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