Best’s News & Research Service - November 22, 2017 11:25 AM (EST)
A.M. Best Affirms Credit Ratings of European Liability Insurance for the Nuclear Industry
- November 22, 2017 11:25 AM (EST)
London //BestWire// - A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of European Liability Insurance for the Nuclear Industry (Elini) (Belgium). The outlook of these Credit Ratings (ratings) remains stable.
The ratings reflect Elini’s overall balance sheet strength, which A.M. Best has categorised as very strong, its strong operating performance, limited business profile and appropriate enterprise risk management.
Elini is a monoline insurer in the nuclear energy sector with a track record of good earnings generation, underpinned by a five-year weighted average operating ratio of 29%. Prospective performance is expected to remain strong and similar to historical levels in the absence of large nuclear liability losses.
Balance sheet strength is supported by the strongest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), taking into account the mutual’s ability to make supplementary capital calls to members. This positive rating factor is somewhat moderated by Elini’s large gross and net line size relative to its capital base. In the unlikely event of a full limit loss, there would be a material depletion of capital. However, the mutual would be able to quickly restore its capital position due to its contractual right to call retrospective premium for 20 times each member’s annualised premium contribution.
A.M. Best has assessed Elini’s business profile as limited, principally due to its moderate size. However, its niche profile in the nuclear energy sector continues to develop, supported by a high level of demand for third-party liability cover. Its gross premium base has grown rapidly over the past five years (2012-2016), demonstrated by a compounded average growth rate of 22%.
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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