AM Best Affirms Credit Ratings of West of England Ship Owners Mutual Insurance Association

AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of West of England Ship Owners Mutual Insurance Association (West or the Club) (Luxembourg). The outlook of 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 2024, 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.

West’s underwriting results improved for a third year in a row at year-end February 2024, after a period of underperformance, resulting in a combined ratio of 94.5% (prior year: 96.7%), as calculated by AM Best. The improvement in results follow actions taken by management, including applying general rate increases for protection & indemnity (P&I) business and de-risking the Club’s portfolio. AM Best expects the Club’s prospective technical performance to remain 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. At year-end February 2024, West reported an overall profit after tax of USD 45.4 million.

West is a specialist marine insurer, focused on mutual P&I business, with some diversification into other marine lines. West’s gross written premium increased by 11.8% to USD 331 million for the year-ending February 2024, reflecting a combination of rate increases and growth from new and existing 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.

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