AM Best Affirms Credit Ratings of Enel Insurance N.V.

AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Enel Insurance N.V. (EINV) (Netherlands), a captive of Enel S.p.A. (Enel), a multinational electric utility company based in Italy. The outlook of these Credit Ratings (ratings) remains stable.

The ratings reflect EINV’s balance sheet strength, which AM Best categorises as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

EINV’s balance sheet strength assessment is underpinned by the strongest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR). The captive maintains good liquidity, with investments composed almost entirely of fixed-income securities and cash funds. An offsetting rating factor is EINV’s high reliance on reinsurance, although the risks associated with this dependence are mitigated partially by the captive’s use of reinsurers of excellent credit quality. Following losses in 2017 mainly driven by reserve strengthening on its property business, the captive reported a net profit of EUR 8.6 million in 2018, stemming from good underwriting performance with a combined ratio of 91.5%. EINV’s underwriting performance over the past five years (2014-2018) compares positively with its targeted through-the-cycle combined ratio of 95% to 100%. Prospectively, AM Best expects the captive to achieve near break-even underwriting results and low-single digit returns on equity.

As a single-parent captive, EINV is well-integrated within the Enel group and plays a fundamental role in managing the group’s risk exposures. The captive’s risk management capabilities are in line with its risk profile.

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 Understanding 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.

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