Best’s News & Research Service - July 07, 2017 10:11 AM (EDT)
A.M. Best Affirms Credit Ratings of Solen Versicherungen AG and Noble Assurance Company
- July 07, 2017 10:11 AM (EDT)
London //BestWire// - A.M. Best has affirmed the Financial Strength Ratings of A (Excellent) and the Long-Term Issuer Credit Ratings of “a+” of Solen Versicherungen AG (SVAG) (Switzerland) and Noble Assurance Company (Noble) (Texas, U.S.A.). The outlook of these Credit Ratings (ratings) remains stable.
The ratings reflect the affiliation of SVAG with its ultimate parent, Royal Dutch Shell plc (Shell), to which it remains important as a risk management tool. In addition, the ratings reflect SVAG’s excellent earnings track record and very strong risk-adjusted capitalisation.
A.M. Best expects SVAG’s risk-adjusted capitalisation to remain very strong, supported by internal capital generation. The captive has an excellent performance track record, largely driven by robust underwriting results, as demonstrated by a five-year average combined ratio of 41%. Prospective performance remains subject to volatility from high severity, low frequency losses, reflecting the type of business underwritten and the captive’s large gross and net maximum line size. The captive does not purchase outward reinsurance cover for the majority of its risks.
Due to the large gross and net maximum line size, one or more large losses in a year could have a material impact on SVAG’s risk-adjusted capitalisation. However, A.M. Best expects that SVAG would be able to quickly replenish capital following such losses either through retention of earnings or by drawing on its contingent capital facility.
SVAG is a key part of its parent’s overall risk management framework. Non-life risks largely consist of offshore and onshore property and liability business, as well as associated business interruption cover. Life business emanating from the group’s pension liabilities is also written. In 2016, SVAG established a fully owned subsidiary, Solen Life Insurance Limited, in Bermuda to provide insurance cover for the group’s pension liabilities. SVAG will fully reinsure these risks. SVAG also has a fully owned Bermudian subsidiary, Solen Insurance Limited, which writes internal reinsurance business.
The ratings of SVAG have been extended to Noble. Both companies are captives of Shell. Noble, which is domiciled in Texas, U.S.A., writes Shell’s U.S. business and cedes 100% of its risks to SVAG through a quota share reinsurance agreement.
A.M. 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 A.M. 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 A.M. 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 A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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