AM Best

MAY 11, 2022 12:16 PM (EDT)

AM Best Affirms Credit Ratings of United Kingdom Mutual War Risks Association Limited

 Dale Kirby
Financial Analyst
+44 20 7397 0276

Tim Prince
Director, Analytics
+44 20 7397 0320

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jeff Mango
Managing Director, Strategy & Communications
+1 908 439 2200, ext. 5204


LONDON - MAY 11, 2022 12:16 PM (EDT)
AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of United Kingdom Mutual War Risks Association Limited (UK War Risks or the Association) (United Kingdom). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect UK War Risks’ balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

UK War Risks’ balance sheet strength is underpinned by its risk-adjusted capitalization that is at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). Offsetting balance sheet strength factors include the Association’s small capital base and material dependence on reinsurance. UK War Risks cedes almost all of its underwriting risk to third-party reinsurers, retaining only a marginal deductible for certain risks. Counterparty credit risk is partly mitigated by the excellent credit quality and good diversification of its reinsurance panel.

Whilst UK War Risks’ overall earnings in recent years have benefited significantly from elevated premium levels, historical operating performance has been dependent on investment earnings due to the Association’s limited risk retention. Prospectively, operating performance is expected to remain sensitive to fluctuations in premium volume and volatility in investment results, with the latter being a result of the Association’s sizeable exposure to equity markets.

UK War Risks has an established profile as a specialist underwriter of war risk insurance, covering a range of commercial marine vessels worldwide. However, the Association is of limited size and its niche underwriting portfolio has a concentrated membership base. The loss of a single large member could lead to a sharp decline in underwriting earnings.

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.

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AMB# Company Name
072513 United Kingdom Mutual War Risks Assn Ltd