Gard P&I (Bermuda) Ltd.

The negative outlook reflects the potential for a one-notch downgrade over the next 12-18 months if the group does not return to at least breakeven levels of underwriting performance on an estimated-total-call (ETC) basis. We expect the club to maintain its current preeminent position in the P&I and wider marine market and an excess of capital above our 'AAA' benchmark. We could lower the ratings if the group does not return to at least breakeven levels of underwriting performance on an ETC basis in FY2023. We could revise the outlook to stable if Gard returns to underwriting profitability and maintains a top-quartile level of performance in the sector over FY2022-FY2023. The global economy will recover from the COVID-19 pandemic in

...Gard P&I (Bermuda) Ltd. (Gard) will remain the dominant player in the P&I segment and a significant participant in the marine market more generally. S&P Global Ratings expects that Gard will remain the largest player in the P&I sector with a market share of close to 18%. This strength, combined with the club's ability to make unbudgeted calls on members, influences our selection of the 'a+' anchor. Gard's recent operating performance has been worse than historical norms but we expect its underwriting result to improve over the next two years. Like many other clubs in the IG, Gard has reported underwriting losses in the past three years. This has largely been driven by its exposure to heightened levels of other clubs' pool claims through the IG's reinsurance pooling arrangement. Despite further significant pool claims in financial year (FY) 2022 (ended Feb. 20, 2022) and future returns of premium to members management, we expect Gard will maintain a comfortable excess at the '###' benchmark....

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