Best’s News & Research Service - April 23, 2020 01:13 PM (EDT)
AM Best Affirms Credit Ratings of National Grid Insurance Company (Isle of Man) Limited
- April 23, 2020 01:13 PM (EDT)
London //BestWire// - 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, supported 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 (2015-2019) weighted average combined ratio of 49%. 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 NGICL’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 property damage, business interruption, casualty and cyber 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 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 New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.