A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of Sveriges Ångfartygs Assurans Förening (The Swedish Club) (the Club) (Sweden). The outlook for both ratings remains stable.

The ratings reflect the Club’s excellent risk-adjusted capitalisation and good, albeit volatile performance track record. As a mutual association, the Club accepts some volatility in underwriting performance, but with five years of profitable operations out of the past six, free reserves have increased from USD 105.9 million at year-end 2008 to USD 184.1 million at year-end 2014. Whilst recognising that large claims or substantial investment losses could have a significant impact on future operating performance, A.M. Best expects the Club’s risk-adjusted capitalisation to remain supportive of the ratings.

For 2015, A.M. Best expects a pre-tax loss of just under USD 7 million, due to the adverse claims experience during the first six months of the year, combined with a negative investment return on the Club’s equity and fixed income portfolios.

The Club has a good underwriting record with a five-year (2010-2014) average combined ratio of 97%, in spite of the combined ratio being approximately 110% in 2011 and 2012. Investment earnings also have been subject to some volatility, due in part to the high allocation to equity investments (approximately 20% as at year-end 2014).

The Club has a good niche business profile as a leading and diversified mutual marine insurer and a member of the International Group of P&I Clubs.

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