AM Best Affirms Credit Ratings of National Grid Insurance Company (Isle of Man) Limited
2024年7月18日 - 10:50PM
ビジネスワイヤ(英語)
AM Best has affirmed the Financial Strength Rating of A-
(Excellent) and the Long-Term Issuer Credit Rating of “a-”
(Excellent) of National Grid Insurance Company (Isle of Man)
Limited (NGICL or the captive), a captive insurer of National Grid
plc (NG). The outlook of these Credit Ratings (ratings) is
stable.
The ratings reflect NGICL’s balance sheet strength, which AM
Best assesses as very strong, as well as its adequate operating
performance, neutral business profile and appropriate enterprise
risk management.
NGICL’s balance sheet strength is underpinned by its
risk-adjusted capitalisation at the strongest level, as measured by
Best’s Capital Adequacy Ratio (BCAR). AM Best expects the captive’s
BCAR scores to remain comfortably above the minimum required for
the strongest assessment, reflecting its strategy to maintain
sufficient capital buffers to absorb potential volatility stemming
from its exposure to low frequency, high severity losses. The
assessment also reflects the captive’s conservative investment
portfolio, which has been derisked in recent years. A partially
offsetting balance sheet factor is the captive’s reinsurance
dependence, driven by the large policy limits needed by NG.
Counterparty credit risk is mitigated partly by the good credit
quality of NGICL’s reinsurance panel.
NGICL has a track record of adequate operating performance,
generating a 10-year (2015-2024) weighted average return on equity
of just over 5%. Results over the cycle have been underpinned by
good underwriting performance, albeit subject to considerable
volatility, as demonstrated by significant losses reported on its
property damage business interruption (PDBI) book in financial
years 2021 and 2022. Nonetheless, the captive reported a healthy
five-year (2020-2024) weighted average combined ratio of 75%.
Prospectively, AM Best expects the captive’s underwriting
performance to be favourable over the longer term, albeit subject
to potential volatility given its high net line sizes relative to
its premium base.
NGICL’s business profile assessment reflects its key role in
supporting NG’s risk management strategy as its principal captive.
The captive is well-integrated into the group’s overall risk
management framework, providing a broad range of primarily PDBI,
casualty and cyber cover to meet NG’s insurance needs.
AM Best remains the leading rating agency of alternative risk
transfer entities, with more than 200 such vehicles rated
throughout the world. For current Best’s Credit Ratings and
independent data on the captive and alternative risk transfer
insurance market, please visit
www.ambest.com/captive.
This press release relates to Credit Ratings that have been
published on AM Best’s website. For all rating information relating
to the release and pertinent disclosures, including details of the
office responsible for issuing each of the individual ratings
referenced in this release, please see AM Best’s Recent Rating
Activity web page. For additional information regarding the use
and limitations of Credit Rating opinions, please view Guide to
Best’s Credit Ratings. For information on the proper use of
Best’s Credit Ratings, Best’s Performance Assessments, Best’s
Preliminary Credit Assessments and AM Best press releases, please
view Guide to Proper Use of Best’s Ratings &
Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specialising in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
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Dale Kirby Financial Analyst +44 20 7397
0276 dale.kirby@ambest.com
Kanika Thukral Associate Director, Analytics
+44 20 7397 0327 kanika.thukral@ambest.com
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Relations +1 908 882 2310
christopher.sharkey@ambest.com
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908 882 2318 al.slavin@ambest.com