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 Solen Versicherungen AG (SVAG) (Switzerland) and Noble Assurance Company (Noble) (Texas, U.S.A.). The outlook of these Credit Ratings (ratings) remains stable.
The ratings reflect SVAG’s balance sheet strength, which A.M. Best categorises as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
SVAG’s balance sheet strength is supported by its risk-adjusted capitalisation being at the very strong level, as measured by Best’s Capital Adequacy Ratio (BCAR).The balance sheet strength assessment benefits from a positive holding company impact, which reflects SVAG’s affiliation with its ultimate parent, Royal Dutch Shell plc (Shell), to which it remains important as a risk management tool. Shell provides explicit support to SVAG in the form of a contingent capital facility that will allow SVAG to replenish its capital quickly following a sequence of very large losses.
A.M. Best expects SVAG’s risk-adjusted capitalisation to remain very strong, supported by internal capital generation. The captive has a strong operating performance track record, largely driven by robust underwriting results, as demonstrated by a five-year average combined ratio of 35.6%. Prospective performance is subject to volatility from exposure to high severity, low frequency losses, reflecting the type of business underwritten and the captive’s large gross and net maximum line size. The captive does not purchase outward reinsurance cover for the majority of its risks.
SVAG’s business profile assessment reflects its key role in the parent’s overall risk management framework, as Shell’s principal captive. Non-life risks largely consist of offshore and onshore property and liability business, as well as the associated business interruption cover. SVAG also reinsures life business emanating from the group’s pension liabilities.
The FSR of A (Excellent) and the Long-Term ICR of “a+” have been affirmed, each with a stable outlook, for Noble, a member of the SVAG rating unit and a subsidiary of Shell. As a captive domiciled in Texas, U.S.A., Noble writes Shell’s U.S. business and cedes 100% of its risks to SVAG through a quota share reinsurance agreement.
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.
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