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 Enel Insurance N.V. (EINV) (Netherlands), a captive of Enel S.p.A. (Enel Group), a multi-national electric utility company based in Italy. The outlook of these Credit Ratings (ratings) remains stable.
The ratings reflect EINV’s strong risk adjusted capitalisation, solid, albeit volatile, operating performance and strategic importance as a risk management tool for the Enel Group.
EINV’s risk-adjusted capitalisation strengthened materially in 2016. This was driven mainly by excellent operating results, which bolstered retained earnings and shareholders’ equity. In addition, following the sale of high risk assets and a reduction in Italian government bonds holdings, EINV increased its investment allocation to fixed income securities with excellent credit quality. An offsetting rating factor is the captive’s high reliance on reinsurance, which is mitigated partially by the good credit quality of its reinsurance panel, along with its close relationship with its reinsurance partners. A.M. Best expects EINV’s risk-adjusted capitalisation to remain strong, supported by internal capital generation and a conservative capital management policy.
EINV’s underwriting performance was excellent in 2016, demonstrated by a combined ratio of 60%. The material improvement from 2015 (103% combined ratio) was driven largely by reserves releases following an actuarial review. A.M. Best expects modest underwriting profits to be achieved in future years, with minimum volatility.
EINV is well-integrated within the Enel Group and plays an increasingly important role in managing the group’s risk exposures. Following the sale of its subsidiary, Compostilla Re S.A., in February 2016, EINV is the only captive providing insurance cover to the group’s operations.
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