The Swedish Club has maintained its A grade with two key credit rating agencies that have been taking a tough line with marine insurers because of concerns over underwriting losses.

S&P Global Ratings (S&P) maintained the Swedish Club's A- rating for long-term insurer's financial strength and issuer credit rating. S&P also maintained a stable outlook on the insurer.

S&P said: “The stable outlook reflects our view that the club will preserve its excellent capital adequacy and improve its underwriting performance.”

AM Best, another agency, also gave the Swedish Club a financial strength rating of A- (excellent).

AM Best took a positive view of the Swedish Club’s diversification into hull and machinery insurance.

The agency said: “The Swedish Club maintains a well-diversified portfolio within the marine insurance market, offering hull and machinery and P&I types of cover, and it benefits from membership in the International Group of P&I Clubs.”

S&P has recently been taking a critical view of the across-the-board underwriting losses by the International Group members and has been urging them to get closer to break-even.

Two years of costly International Group pooled claims has pushed the Swedish Club into an underwriting loss this year. However, S&P pointed out that over the past seven years, the club has an average combined ratio of 98% indicating that it is in profit in the long term.

S&P said: “In our view, the club has a large enough cushion to absorb the losses in 2020 caused by adverse market conditions and Covid-19 related investment market volatility.”

Swedish Club managing director Lars Rhodin said: “This welcome result was earned through the club’s long-term strategy of prudent risk management and a commitment to providing excellent levels of service to our members.”

Rhodin said that the S&P rating was a recognition of the Swedish Club’s “resilient capital position in a volatile year” and “disciplined underwriting and risk control”.

The Swedish Club provides shipowners and charterers P&I cover to 2,231 vessels amounting to 85.6m gt. It is involved in the hull and machinery insurance of 4,223 vessels amounting to 45.5m gt.

In the first half of 2020 its free reserves stood at $225m.