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FOR IMMEDIATE RELEASE
AMSTERDAM - SEPTEMBER 21, 2023 10:37 AM (EDT)
AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to West of England Ship Owners Mutual Insurance Association (West or the Club) (Luxembourg). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect West’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
West’s balance sheet strength assessment is underpinned by risk-adjusted capitalisation at the strongest level at year-end February 2023, as measured by Best’s Capital Adequacy Ratio (BCAR). The Club’s balance sheet strength assessment is also supported by a prudent reserving approach and good liquidity. The Club benefits from its membership in the International Group of P&I Clubs’ pooling agreement and shared reinsurance programme, which allows it to provide the large insurance cover limits required by ship owners.
Following a period of underperformance, West’s underwriting results improved for year-end February 2023, resulting in a combined ratio of 97% (prior year: 114%), as calculated by AM Best. The improvement in results follow actions taken by management including applying general rate increases for P&I business and de-risking the portfolio. AM Best expects the Club’s prospective technical performance to be supportive of the adequate assessment, despite being subject to volatility due to large claims exposure. The Club’s non-technical performance is also subject to volatility as all unrealised gains and losses are accounted for through profit and loss. For year-end February 2023, West reported an overall loss after tax of USD 20 million due to unrealised investment losses.
West is a specialist marine insurer, focused on mutual P&I business, with some diversification into other marine lines. The Club benefits from membership in the International Group of P&I Clubs. West’s gross written premium increased by 10% for the year-ending February 2023 to USD 296 million, primarily reflecting the Club’s general rate increases for its P&I members.
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.