A.M. Best Withdraws Credit Ratings of SCHWARZMEER UND OSTSEE Versicherungs-Aktiengesellschaft

By a News Reporter-Staff News Editor at Investment Weekly News -- A.M. Best has affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of "bbb-" of SCHWARZMEER UND OSTSEE Versicherungs-Aktiengesellschaft (SOVAG) (Germany). The outlook of these Credit Ratings (ratings) remains negative. Concurrently, A.M. Best has withdrawn the ratings at the company's request to no longer participate in A.M. Best's interactive rating process.

The ratings reflect SOVAG's adequate risk-adjusted capitalisation, which is supportive of its current business strategy. An offsetting rating factor is the potential impact of expense strain on the company's capital position.

SOVAG ceased writing all lines of business at the beginning of 2017. The company's current risk-adjusted capitalisation is regarded as adequate, supported by a capital injection of EUR 10 million in February 2017 from its shareholders and a decline in underwriting risk due to its decision to cease writing new business. Additionally, SOVAG continues to benefit from a comprehensive reinsurance programme and a strong liquidity profile. Prospective earnings are likely to be affected by substantial expense strain associated with the management of its historical business, which will be only marginally offset by modest investment income. The company is exploring efficient solutions to manage this expense.

Keywords for this news article include: A.M. Best, Investing.