AM Best withdraws credit rating of Transmonde Services

AM Best has withdrawn the financial strength rating of ‘A’ (Excellent) and the long-term issuer credit rating of ‘a’ (Excellent) of Transmonde Services Insurance Company, following the company’s decision to cease participation in the agency’s interactive rating process.

At the time of withdrawal, both ratings carried a ‘stable’ outlook.

Based in Bermuda, Transmonde operates as a single-parent captive for its Swiss-listed parent SGS, providing professional, property, cyber, general and pollution liability coverage to the group’s subsidiaries worldwide.

The ratings reflected Transmonde’s very strong balance sheet, strong operating performance, limited business profile and appropriate enterprise risk management.

Offsetting factors included the company’s high retention levels and concentration in liability lines with potentially severe losses.

Despite these exposures, AM Best noted that Transmonde had consistently reported favourable loss experience.

The company has maintained conservative underwriting leverage, supported by strong surplus levels relative to its business volumes. Growth in surplus has primarily resulted from retained earnings generated through profitable underwriting performance.

Transmonde also has a history of distributing excess capital to its parent on a conservative basis. Its low loss and loss adjustment ratios reflect SGS’s effective risk management framework.

According to AM Best, although Transmonde retains relatively high per-occurrence limits, these are mitigated by substantial deductibles and conservative reserving practices.