LONDON--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of Eni Insurance Designated Activity Company (EID) (Ireland). The outlook for these Credit Ratings (ratings) is stable.
EID is the sole captive insurer of Eni S.p.A. (Eni), an Italian multinational gas and oil company with operations in more than 60 countries.
The ratings reflect EID’s track-record of strong underwriting profitability and excellent risk-adjusted capitalisation. The ratings also consider the captive’s importance to the Eni Group as a risk management tool. These positive rating factors are partially offset by EID’s exposure to peripheral European sovereign bonds. In addition, EID has exposure to potentially substantial underwriting losses due to its large gross maximum line size.
EID’s risk-adjusted capitalisation is expected to remain excellent. Available capital is likely to increase in 2016 due to a non-recurring return premium payment of EUR 17.5 million to EID from a reinsurance company, as well as expected good underlying earnings (subject to large loss experience in the remainder of the year).
EID produced a pre-tax profit of EUR 108.7 million in 2015 (2014: EUR 96.8 million), underpinned by a strong underwriting result and a modest investment return. The combined ratio was excellent at 45%. The improvement on the previous year’s 52% was driven by an increase in net earned premiums. Prospective performance is subject to volatility due to potential large losses from EID’s property account and unrealised gains/losses from its peripheral European sovereign bond portfolio. However, underwriting volatility should be moderated by the captive’s comprehensive reinsurance programme which remains broadly unchanged from the previous year.
A.M. 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 A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.
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