AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb” (Good) of Mutua de Riesgo Maritimo, Sociedad de Seguros a Prima Fija (Murimar) (Spain). The outlook of these Credit Ratings (ratings) is negative.
The Credit Ratings (ratings) reflect Murimar’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).
The negative outlooks reflect concerns regarding the appropriateness of Murimar’s risk management capabilities, including capital management approach, in the context of significant business growth experienced over the past three years and prospective expansion plans.
Murimar’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), fell to the very strong level at year-end 2022 from the strongest level in the previous year, primarily driven by higher underwriting risk as a result of significant growth in the mutual’s business profile. The higher capital requirements were only offset partly by higher retained earnings achieved through improved underwriting performance. Murimar’s balance sheet strength also factors in its small capital base, which can give rise to volatility in risk-adjusted capitalisation.
AM Best considers Murimar’s operating performance to be adequate. In 2022, the mutual achieved record profits after-tax of EUR 1.3 million, and a combined ratio of 93.4%, below Murimar’s five-year average of 96.9% (2018-2022) (as calculated by AM Best). Prospectively, AM Best expects the mutual to maintain this level of profitability, following the change in its reinsurance structure.
Murimar is a niche insurer focused on marine hull and cargo insurance for small- to medium-sized vessels in Spain. Murimar ranks third overall in Spain’s marine market and first in its fishing vessel segment. In 2022, Murimar reported non-life gross written premium (GWP) of EUR 31.8 million. Distribution through Murimar’s strong agency network and effective client retention aided by its mutual status support the market positions. Although concentrated in its domestic market, Murimar has started to expand internationally over the past three years. In 2022, international business represented 24% of its GWP, reflecting a 31% increase in international premium over 2021 reported figures.
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Jose Berenguer, CFA
Senior Financial Analyst
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Dr. Angela Yeo
Senior Director, Analytics
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Manager, Public Relations
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Senior Public Relations Specialist
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