AMSTERDAM--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of European Liability Insurance for the Nuclear Industry (ELINI) (Belgium). The outlook of these Credit Ratings (ratings) remains stable.
The ratings reflect ELINI’s balance sheet strength, which AM Best categorises as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management. ELINI is a mutual insurer writing third-party liability business in the nuclear energy sector.
ELINI’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR); taking into account the mutual’s ability to make supplementary capital calls to its members. In the unlikely event of a full limit loss, there would be a material depletion of capital due to the large gross and net line size offered by ELINI relative to its capital base. However, AM Best expects ELINI to rebuild its capital position quickly due to its contractual right to call retrospective premium for 20 times each member’s annualised premium contribution.
ELINI has a track record of good earnings generation, demonstrated by a five-year weighted average operating ratio of 25%. AM Best expects prospective performance to remain strong and similar to historical levels in the absence of a large nuclear liability loss.
ELINI has a developing profile in the specialist nuclear energy sector. Gross written premium has grown rapidly, averaging 10% for the five-year period ending in 2018, supported by strong demand for third-party liability cover. The mutual’s competitive offering is enhanced by its provision of loss prevention services to its members. A partially offsetting factor is the high risk profile of its underwritten risks, which is moderated somewhat by good geographical diversification.
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