S&P Upgrades Norway’s Gard P&I, M&E to ‘A+’

Standard & Poor’s Ratings Services has raised its long-term counterparty credit and insurer financial strength ratings on Norway-based marine insurer Assuranceforeningen Gard – gjensidig – (Gard P&I) and its Bermuda-based subsidiary Gard Marine & Energy Ltd. (Gard M&E) to “A+” from “A”, and maintained a stable outlook on both entities.

“The upgrades reflect the Gard group’s improved capitalization and reserves, as well as the group’s leading status and competitive strengths in the Nordic and international protection and indemnity (P&I) and marine and energy (M&E) insurance markets,” S&P said. “In addition, the ratings are supported by an operating performance considered more than satisfactory in the context of the parent P&I club’s marine mutual structure, as well as its highly effective management and systems.”

However, the rating agency indicate that “the moderately high industry risk of the P&I and M&E sectors, and the group’s aggressive investment strategy relative to the non-life insurance industry as a whole,” should be considered as partially “offsetting these strengths.”

“The stable outlook reflects our expectation that the Gard group’s risk-based capital adequacy will not only be maintained at very strong levels, but that it will continue to benefit from the underlying strength of the group’s operating performance,” stated S&P credit analyst Peter McClean.

S&P also noted: “Free reserves are expected to reach about $490 million at February 2007 and more than $530 million at February 2008. Standard & Poor’s regards any further upside to the ratings as extremely limited in the medium term. Conversely, any significant deterioration in the Gard group’s capitalization may lead to the outlook being revised to negative. The stable outlook on Gard M&E reflects that on its parent, Gard P&I.”