MARCH 30, 2021 01:46 PM (EDT)
AM Best Assigns Credit Ratings to Cedar Hamilton Limited; Affirms Credit Ratings of Nuclear Electric Insurance Limited
Senior Financial Analyst
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Steven M. Chirico, CPA
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Manager, Public Relations
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FOR IMMEDIATE RELEASE
OLDWICK - MARCH 30, 2021 01:46 PM (EDT)
AM Best has assigned a Financial Strength Rating (FSR) of A (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a+” to Cedar Hamilton Limited (Hamilton, Bermuda). The outlook assigned to these Credit Ratings (ratings) is stable. Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a+” of Nuclear Electric Insurance Limited (NEIL) (Wilmington, DE). The outlook of these ratings is stable. Cedar Hamilton is a wholly owned subsidiary of NEIL.
The ratings reflect NEIL and Cedar Hamilton’s (the group’s) balance sheet strength, which AM Best assesses as strongest, as well as their marginal operating performance, favorable business profile and appropriate enterprise risk management.
As a wholly owned subsidiary of NEIL, Cedar Hamilton plans to provide specialty lines capacity to NEIL’s members. The ratings assigned to Cedar Hamilton reflect the existence of explicit financial support from NEIL to Cedar Hamilton in the form of an 80% intercompany quota share reinsurance agreement with NEIL, along with a net worth maintenance agreement.
The ratings are reflective of the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). NEIL continues with its mission of maintaining the financial strength to cover two full-limit nuclear losses, while promoting industry risk management and safety practices. The ratings also recognize NEIL’s management culture and exclusive leadership position in the U.S. nuclear power-generating industry, as well as its comprehensive loss prevention program supported by a staff of loss prevention specialists.
Partially offsetting these positive rating factors is the inherent volatility in NEIL’s underwriting results due to the nature of the risks it insures and its associated claims activity, along with the financial stress associated with the unlikely event of two full-limit losses. These risks are mitigated somewhat by NEIL’s history of maintaining sufficient capital to support its ongoing obligations, which includes demonstrated financial flexibility in suspending policyholder distributions. NEIL also has the contractual right to assess a retrospective premium for 10 times each member’s annualized premium, which strengthens the company’s financial flexibility. This facility has never been used.
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 Guide to 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 credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.