S&P affirms NorthStandard A' ratings; outlook stable

S&P affirms NorthStandard A' ratings; outlook stable

S&P Affirms NorthStandard ‘A’ Ratings; Outlook Stable

S&P Global Ratings has affirmed its ‘A’ credit ratings for NorthStandard Ltd. and its subsidiaries, with a stable outlook, citing the insurer's strong capital position and prudent risk management despite challenging market conditions. The rating agency noted that NorthStandard is expected to report technical losses for the fiscal year ending February 20, 2025, following two years of solid performance, due to a heightened pool claim environment.

The stable outlook reflects S&P's expectation that NorthStandard will maintain capital adequacy aligned with its 99.99% confidence level and that underwriting results will recover to 100%-105% of premium income within 12-24 months. NorthStandard has responded to ongoing market unpredictability by implementing a 5% increase in protection and indemnity (P&I) premiums for the marine insurance year starting February 20, 2026. This adjustment aims to address inflationary pressures and the risk of large, complex claims, including those related to geopolitical disruptions and ship fires.

Financial projections for 2025-26 indicate premium income of $930 million, up from $886 million in the prior year, alongside investment returns exceeding 6% and free reserves of $900 million. While the claims environment has improved compared to 2024-25, NorthStandard remains cautious, projecting a combined ratio of 104% for year-end 2025-26, down 10 percentage points from the previous year.

The insurer has also expanded its product offerings, launching a Marine & Energy Liabilities portfolio and a combined Hull & Machinery and P&I product to strengthen its diversification strategy. Executives emphasized that these initiatives, alongside disciplined underwriting, support long-term financial resilience amid persistent uncertainties in global trade and claims patterns.

S&P's affirmation underscores NorthStandard's ability to balance growth with risk mitigation, ensuring continued alignment with its 'A' rating and 'Stable AAA' capital strength.