Research Update: Britannia 'A' Rating Affirmed Following Revised Capital Model Criteria; Outlook Negative

On Nov. 15, 2023, we published our revised criteria for analyzing insurers' risk-based capital (see "Insurer Risk-Based Capital Adequacy--Methodology And Assumptions"). Following the implementation of our revised capital model criteria, we continue to assess Britannia's capital and earnings as excellent. As a result, we affirmed our ratings, including our 'A' issuer credit rating, on the insurer. The negative outlook reflects the uncertainty over Britannia's ability to restore underwriting profitability over the next 12-24 months. On Mar. 4, 2024, S&P Global Ratings affirmed its 'A' long-term financial strength and issuer credit ratings on mutual insurer The Britannia Steam Ship Insurance Assn. Europe (Britannia or the club). The outlook remains negative. Under our revised framework, we expect Britannia's risk-based capital adequacy to

...Key strengths Key risks Extremely well capitalized, with capital exceeding the 99.99% confidence level. A largely undiversified product range with exclusive focus on protection and indemnity (P&I) lines. Close and long-standing relationships with shipowner members, with strong mutual ethos and selective approach to underwriting. Exposure to the volatile marine P&I insurance market, with high claims variability....

Research Update