AM Best has affirmed the credit ratings of Bermudian-based Transmonde Services Insurance Company Ltd, the Class 3 insurer licensed and regulated by the Bermuda Monetary Authority.

The agency affirmed the company’s financial strength rating of A (Excellent) and the long-term issuer credit rating of “a” (Excellent).

The outlook of these credit ratings is stable.

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

AM Best said: “Partially offsetting these rating factors are Transmonde’s high retentions and concentration in liability lines with significant loss severity potential, although the company has experienced historically favourable loss experience.

“Additional offsetting factors include the company’s limited market profile as a single-parent captive that derives all its business from its parent company, SGS SA, a publicly traded Swiss company.

“Transmonde provides professional, property, cyber, general and pollution liability coverages to subsidiaries of SGS.

“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. Transmonde has a history of conservatively distributing excess capital back to SGS.

“The company has posted low loss and loss adjustment ratios, which reflect SGS’s robust and effective risk management. Its relatively high per-occurrence retentions are mitigated by significant deductibles and conservative reserving practices.”