A.M. Best Upgrades Issuer Credit Rating of BNY Trade Insurance, Ltd.
OLDWICK, N.J. -- October 26, 2012
A.M. Best Co. has upgraded the issuer credit rating to “a+” from “a” and
affirmed the financial strength rating of A (Excellent) of BNY Trade
Insurance, Ltd. (BNY Trade) (Hamilton, Bermuda). The outlook for both ratings
The rating actions reflect BNY Trade’s strong capitalization, consistently
positive operating results, conservative operating strategy and robust
enterprise risk management (ERM) framework as it follows its parent, The Bank
of New York Mellon Corporation’s (BNY Mellon) [NYSE: BK], ERM practices. The
ratings also recognize BNY Trade’s excellent business position, as it has
close ties to BNY Mellon, a leading global financial services company.
Partially offsetting these positive rating factors are BNY Trade’s limited
market scope, product mix and dependence on third parties for processing,
servicing and administration. An additional offsetting rating factor is BNY
Trade’s large (gross) underwriting exposure as it offers high gross insurance
limits and insures excess bankers’ professional liabilities with substantial
BNY Trade provides comprehensive re/insurance coverage/products to BNY Mellon.
The company’s reinsurance has been placed with the world’s significant
providers and it benefits from BNY Mellon’s significant financial resources,
extensive risk mitigation and the safety programs, which have been implemented
throughout the organization.
As BNY Trade fully cedes assumed risk under primary bankers’ professional
coverages to the commercial market, its exposure to net underwriting losses is
minimal. BNY Trade’s projected operating results indicate favorable returns,
and its surplus base of over $98 million is more than adequate to support the
company’s asset and credit risk exposure. While BNY Trade’s excess bankers’
professional program offers significant insured values (considering the high
coverage limits offered), the net impact could be burdensome. Nevertheless,
A.M. Best recognizes the low probability of such events.
The company's ratings are not expected to be upgraded and its outlook revised
within the next year as its operating performance and capital position have
already been considered in the ratings process. Conversely, any material
adverse deviations with regard to management, earnings, capitalization or risk
profile could potentially undermine the stability of the company’s ratings. In
addition, deterioration in the credit profile of BNY Mellon could impact BNY
A.M. Best remains the leading rating agency of alternative risk transfer
entities, with more than 200 such vehicles rated in the United States and
throughout the world.
For current Best’s Credit Ratings and independent data on the captive and
alternative insurance market, please visit www.ambest.com/captive.
The methodology used in determining these ratings is Best’s Credit Rating
Methodology, which provides a comprehensive explanation of A.M. Best’s rating
process and contains the different rating criteria employed in the rating
process. Key criteria utilized include: “Risk Management and the Rating
Process for Insurance Companies”; “Alternative Risk Transfer (ART)”;
“Understanding BCAR for Property/Casualty Insurers”; “Understanding Universal
BCAR”; and “Catastrophe Analysis in A.M. Best Ratings.” Best’s Credit Rating
Methodology can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world’s oldest and most
authoritative insurance rating and information source. For more information,
Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
A.M. Best Company, Inc.
Alexander Sarfo, 908-439-2200, ext. 5779
Senior Financial Analyst
Steven Chirico, CPA, 908-439-2200, ext. 5087
Assistant Vice President
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
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