A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a” of Transmonde Services Insurance Company, Limited (Transmonde) (Bermuda). The outlook for each rating is stable.

The ratings and outlooks reflect Transmonde’s excellent risk-adjusted capitalization, minimal underwriting leverage and consistently profitable operating results driven by excellent underwriting performance.

Partially offsetting these positive rating factors are its relatively high retentions and concentration in liability lines with significant loss severity potential, and its limited market profile as a single parent captive. Transmonde provides professional, general and pollution liability coverages to members of the International Association of Superintendents, which are subsidiaries of SGS SA (SGS), a publicly traded Swiss company [SWX: SGSN].

Transmonde has maintained very conservative underwriting leverage ratios as surplus has remained strong to support its business volumes. Historically, surplus growth is the result of retained earnings from highly profitable operating results driven by excellent underwriting performance. The company has posted low loss and loss adjustment expense ratios, reflecting SGS’s effective risk management. Its relatively high per occurrence retentions are mitigated by significant deductibles and conservative reserving practices.

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