Best’s News & Research Service - October 16, 2014 09:08 AM (EDT)
A.M. Best Affirms Ratings of Rembrandt Insurance Company, Ltd.
London //BestWire// - A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of "a" of Rembrandt Insurance Company, Ltd. (Rembrandt) (Bermuda). The outlook for both ratings remains stable.
Rembrandt is a captive of Vitol Holding BV (Netherlands), a holding company of a group engaged principally in the trading of petroleum related products and commodities.
The ratings of Rembrandt reflect the company's strong financial performance and excellent risk-adjusted capitalisation, as well as its importance to the Vitol group as a risk management tool.
Rembrandt consistently generates very strong operating results, as demonstrated by an average five-year adjusted return on capital of 17.9%. Its strong financial performance is driven by excellent underwriting results, with an average five-year combined ratio of 19.5%, and is supported by stable, albeit relatively low, investment income.
The company's risk-adjusted capitalisation remains excellent, underpinned by good internal capital generation and an outward reinsurance programme that is placed with a strong panel of reinsurers. A marginally offsetting factor is the loan facility provided by Rembrandt to the Vitol group, which represents 70% of total investments. However, the investment risk associated with this loan is somewhat mitigated by the loan terms, which allow the loan to be redeemed following a short notice period.
A.M. Best believes that Rembrandt is well positioned at its current rating level. Negative rating actions could follow a prolonged period of weak underwriting results, as well as a significant deterioration in Rembrandt's risk-adjusted capitalisation.
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.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
Key insurance criteria reports utilized:
- Alternative Risk Transfer (ART)
- Catastrophe Analysis in A.M. Best Ratings
- Evaluating Non-Insurance Ultimate Parents
- Rating Members of Insurance Groups
- Risk Management and the Rating Process for Insurance Companies
- Understanding BCAR for Property/Casualty Insurers
- Understanding Universal BCAR
In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.
This rating announcement has been issued by A.M. Best Europe - Rating Services Limited, which is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.