AM Best Affirms Credit Ratings of National Grid Insurance Company (Isle of Man) Limited
- September 16, 2026 09:05 AM (EDT)
//BestWire// - AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of National Grid Insurance Company (Isle of Man) Limited (NGICL or the captive), 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 assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
NGICL’s balance sheet strength is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best expects the captive’s BCAR scores to remain comfortably above the minimum required for the strongest assessment, reflecting its strategy to maintain sufficient capital buffers to absorb potential volatility stemming from its exposure to low frequency, high severity losses. The assessment also reflects the captive’s conservative investment portfolio, which is allocated primarily to money market funds with solid liquidity and excellent underlying credit quality. However, the captive’s reinsurance dependence is considered to be high, driven by the large policy limits needed by NG. Counterparty credit risk is mitigated partially by the strong credit quality of NGICL’s reinsurance panel.
NGICL has a track record of adequate operating performance, generating a five-year (2022-2026) weighted average return on equity of 9.4%. Earnings over the cycle have improved, underpinned by prudent underwriting evidenced by a five-year weighted average combined ratio of 53.7%, compared with a 10-year weighted average of 69.2%. Prospectively, AM Best expects the captive’s underwriting performance to be favourable over the longer term, albeit subject to potential volatility given its high net line sizes relative to its premium base.
NGICL’s business profile assessment reflects its key role in supporting NG’s risk management strategy as its principal captive. The captive is well-integrated into the group’s overall risk management framework, providing a broad range of primarily property damage, business interruption, casualty and cyber covers to meet NG’s insurance needs.
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 Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings (BCR), Best’s Performance Assessments (PA), Best’s Preliminary Credit Assessments (PCA) and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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.