Gard P&I (Bermuda) Ltd.

The stable outlook indicates that we expect the club to retain its preeminent position in the P&I and marine sectors over the next two years. It will demonstrate this by outperforming its P&I peers in terms of underwriting performance. We also expect Gard to maintain its robust capital levels, comfortably exceeding our 'AAA' category levels over the next two years. We could lower the rating if Gard were to record combined ratios on an estimated total call basis that were consistently above 100% over a prolonged period, or if the club's underwriting lagged the P&I average result. We could also lower the rating if the group's risk-based capital adequacy fell consistently below our 'AAA' levels, which could occur if it

...Gard P&I (Bermuda) Ltd. (Gard or the club) 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 operating performance improved significantly in the second half of fiscal year 2021-2022 allowing the club to record its first underwriting profit since fiscal year 2017-2018. We expect the club to continue to record underwriting profits over 2022-2024 assuming more normalized pool claims from other clubs over the same period. Despite mark-to-market losses on its bond portfolio in 2022, we expect that Gard will continue to return premiums to its members at the same rate while maintaining a comfortable excess over our '###' benchmark in our risk-based model. Like most peers,...

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