Press Release - JUNE 05, 2019

AM Best Affirms Credit Ratings of National Grid Insurance Company (Isle of Man) Limited


CONTACTS:
 Martina Seydoux
Financial Analyst
+44 20 7397 0308
martina.seydoux@ambest.com

Ghislain Le Cam, CFA, FRM
Director, Analytics
+44 20 7397 0268
ghislain.lecam@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

LONDON - JUNE 05, 2019
AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of National Grid Insurance Company (Isle of Man) Limited (NGICL), a captive insurer of National Grid plc (NG). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect NGICL’s balance sheet strength, which AM Best categorises as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

NGICL’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best expects NGICL’s prospective risk-adjusted capitalisation to remain at the strongest level, underpinned by the captive’s low underwriting leverage and comprehensive reinsurance programme.

NGICL has a track record of strong underwriting performance, as evidenced by a five-year (2014-2018) weighted average combined ratio of 45%. Prospective operating performance remains subject to volatility, due to the captive’s exposure to low frequency, high severity losses in its property damage and business interruption account. However, the impact of large losses on the captive’s balance sheet is mitigated partly by extensive reinsurance protection.

NGICL’s neutral business profile assessment reflects its core role in NG’s risk management strategy as its principal captive. It is well-integrated into NG’s overall risk management framework, and its primary objective is to mitigate the NG group’s European financial exposure to casualty, cyber, property damage and business interruption risks.

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.

This press release relates to Credit Ratings that have been published on AM 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 AM 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. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry.


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