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 NGICLs 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.
NGICLs balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Bests Capital Adequacy Ratio (BCAR). AM Best expects NGICLs prospective risk-adjusted capitalisation to remain at the strongest level, underpinned by the captives low underwriting leverage and comprehensive reinsurance programme.
NGICL has a track record of strong underwriting performance, as evidenced by a five-year (2014-2018) weighted average combined ratio of 45%. Prospective operating performance remains subject to volatility, due to the captives exposure to low frequency, high severity losses in its property damage and business interruption account. However, the impact of large losses on the captives balance sheet is mitigated partly by extensive reinsurance protection.
NGICLs neutral business profile assessment reflects its core role in NGs risk management strategy as its principal captive. It is well-integrated into NGs overall risk management framework, and its primary objective is to mitigate the NG groups European financial exposure to casualty, cyber, property damage and business interruption 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 Bests 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 Bests 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 Bests Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Bests Credit Ratings. For information on the proper media use of Bests Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Bests Credit Ratings and AM Best Rating Action Press Releases.
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