S&P affirms sector leader Skuld ‘A’ rating with ‘stable’ outlook


Published: 26 June 2014

On 25 June 2014, Standard & Poor's Ratings Services affirmed its 'A' insurer financial strength rating on Norway-based marine insurer Assuranceforeningen SKULD (Gjensidig). The outlook is stable.

Excerpt from the report, 'Rationale': 

We have affirmed our rating on Skuld following a review of its performance in 2013 and so far in 2014, revising upward our earnings and capital adequacy forecasts for the company for 2014-2016. The revision in our capital adequacy ratios is the result of Skuld's better-than-anticipated improvement in its risk-adjusted capital ratios considering exceptional growth over the last year. This means that we expect Skuld's total adjusted capital (TAC; our definition of risk-adjusted capital) will be above or only just below the 'AA' rating level by February 2016. This has strengthened our view of Skuld's capital and earnings and financial risk, and caused us to raise the company's anchor to 'a' from 'a-'.

The ratings on Skuld reflect our assessments of its strong business risk profile and strong financial risk profile, built on its strong competitive position and strong capital and earnings. Under our criteria, these factors lead to anchors of either 'a' or 'a-'. We have selected the 'a' anchor to reflect the club's outperformance in the market and our expectation that the club's recent diversification initiatives will add value. Following on from our raising the anchor, we have removed the previously applied one-notch  holistic adjustment. The ratings are the same as the anchor on the basis that we view enterprise risk management and management and governance practices as neutral factors.