A.M. Best Revises Outlook to Positive for BNY Trade Insurance Ltd.

A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating of A- (Excellent) and issuer credit rating of "a-” of BNY Trade Insurance Ltd. (BNY Trade) (Hamilton, Bermuda).

The ratings 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’s, The Bank of New York Mellon Corporation, (BNY Mellon) (NYSE: BK), ERM practices.

Partially offsetting these positive rating factors are BNY Trade’s limited market scope, product mix and substantial concentration in the investment of its assets. An additional offsetting rating factor is BNY Trade’s large (gross) underwriting exposures as it offers very high gross insurance limits and insures excess bankers’ professional liabilities with substantial insured values.

The ratings recognize BNY Trade’s excellent business position, as it has close ties to and is a wholly owned subsidiary of BNY Mellon, a leading global financial services company.

BNY Trade provides comprehensive reinsurance/insurance coverages/products. The company’s reinsurance is placed with the world’s significant providers, and it benefits from BNY Mellon’s significant financial resources, extensive risk mitigation and the safety programs implemented throughout the organization.

As BNY Trade cedes fully assumed risk under primary bankers’ professional coverages and an all risk property policy, the company’s exposure to net underwriting losses is minimal. BNY Trade’s projected operating results indicate favorable returns, and its surplus base of over $90 million is more than adequate to support the company’s asset and credit risk exposure. While the excess bankers’ professional program and the property coverages written offer 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.

For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.