Steamship Mutual Underwriting Assn. (Bermuda) Ltd. (The)

The negative outlook indicates that we could lower the ratings by one notch within the next two years if Steamship cannot remedy its underwriting performance so that it breaks even again, or if its capital were to fall below our 'AAA' benchmark. We could lower the rating by one notch if Steamship did not report combined ratios of 100% or below by February 2024, or if we predicted that Steamship's capital adequacy was likely to fall below the 'AAA' benchmark in our risk-based capital model. We could revise the outlook to stable if Steamship's underwriting performance returned to at least breakeven levels over the next 12-24 months and it also retained capital at least at the 'AAA' level. In 2023,

...Steamship will maintain its strong reputation and strong competitive position in the P&I sector, in our opinion. Steamship's disciplined approach to underwriting and management's continuing focus on servicing customer needs will allow Steamship to maintain strong retention levels and an underwriting balance over the long term. The club's combined ratio has been improving and we expect it to come down from an initial budget of 106% to about 100% in the fiscal year ending Feb. 20, 2023 (fiscal 2023) from 111.5% in fiscal 2022 (ratios under 100% indicate an underwriting profit). Similar to other clubs, the better-than-expected underwriting performance is driven by a lack of pool claims so far. We expect Steamship's capital position to remain extremely strong. Despite the losses recorded in fiscal 2022, Steamship has maintained a significant excess of capital over the '###' level of our risk-based model. Steamship's Solvency II capital ratio reduced to 177% at February 2022 from 195% at February...

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