AMSTERDAM--(BUSINESS WIRE)--AM 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 SpA (Enel), a multinational electric utility company based in Italy. The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect EINV’s balance sheet strength, which AM Best categorises as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
EINV’s balance sheet strength assessment is underpinned by the strongest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR). The captive maintains good liquidity, with investments composed almost entirely of fixed-income securities and cash funds. An offsetting rating factor is EINV’s high reliance on reinsurance, although the risks associated with this dependence are mitigated partially by the captive’s use of reinsurers of excellent credit quality. In 2019, technical results remained positive standing at EUR 4.3 million, reporting a combined ratio of 96.3%. EINV’s underwriting performance over the past five years (2015-2019) compares positively with its targeted through-the-cycle combined ratio of 95% to 100%. Prospectively, AM Best expects the captive to achieve near break-even underwriting results and low single-digit returns on equity.
As a single-parent captive, EINV is well-integrated within the Enel group and plays a fundamental role in managing the group’s risk exposures. The captive’s risk management capabilities are in line with its risk profile.
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.
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