LONDON--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Ratings of A (Excellent) and the Long-Term Issuer Credit Ratings of “a+” (Excellent) of MS Amlin AG (Switzerland), and Lloyd’s Syndicate 2001 (Syndicate 2001) (United Kingdom), which is managed by MS Amlin Underwriting Limited. The outlooks of these Credit Ratings (ratings) are stable.
The ratings of MS Amlin AG reflect its 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 (ERM). In addition, MS Amlin AG’s ratings benefit from enhancement due to the support of its ultimate parent, MS&AD Insurance Group Holdings, Inc. (MS&AD).
The ratings of Syndicate 2001 reflect the balance sheet strength of the Lloyd’s market, which AM Best assesses as very strong, as well as the market’s strong operating performance, favourable business profile and appropriate ERM. The Lloyd’s market rating is the floor for all syndicate ratings, reflecting the Lloyd’s chain of security, and, in particular, the role of the Central Fund, which partially mutualises capital at the market level.
MS Amlin AG is a mid-tier reinsurer with gross written premium of CHF 1.4 billion (USD 1.6 billion) in 2020. The company’s market position and brand benefit from its association with Syndicate 2001 and MS&AD. Syndicate 2001 is one of the largest Lloyd’s syndicates, with a capacity of GBP 1.6 billion for the 2021 year of account. MS Amlin AG and Syndicate 2001 are the key operating subsidiaries of Mitsui Sumitomo Insurance Company, Limited (MSI) in Europe. Syndicate 2001 writes a diversified book of property/casualty, marine and reinsurance business. MS Amlin AG writes reinsurance business only.
MS Amlin AG’s balance sheet strength is underpinned by its risk-adjusted capitalisation being at the strongest level, based on Best’s Capital Adequacy Ratio (BCAR) as at year-end 2020. The capital position is subject to potential volatility, due to the company’s exposure to high-severity losses. Nevertheless, AM Best expects that the company will maintain the strongest level of risk-adjusted capitalisation, supported by MS&AD if required. MS Amlin AG’s ratings consider the company’s strategic importance to MS&AD as the group’s principal international reinsurer.
MS Amlin AG and Syndicate 2001 reported underwriting losses in 2020 with combined ratios, as calculated by AM Best, of 106.7% and 118.8%, respectively. Loss ratios were impacted adversely by COVID-19 losses and to a lesser extent natural catastrophe events. Strategic portfolio remediation continued in 2020 and MS Amlin AG reported improved technical performance from 2019, excluding the COVID-19 losses. Syndicate 2001 exited a number of lines of business in 2020, which contributed to a reduction in net earned premium. MS Amlin AG and Syndicate 2001 reported positive investment returns in 2020.
On 1 January 2020, the ownership of MS Amlin AG along with Syndicate 2001’s managing agent and corporate member transferred from MS Amlin plc to MSI, a wholly owned subsidiary company of MS&AD. Throughout 2020 and continuing in 2021, a number of services and functions that were provided previously by a central company were transferred into the insurance entities. These structural changes increase transparency, simplify the operating model and facilitate greater oversight.
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