A.M. Best has affirmed the financial strength rating of “A (Excellent)” and issuer credit rating of “a” of National Grid Insurance Company (NGIC), based in the Isle of Man. The outlook for both ratings remains stable.
NGIC’s ratings reflect its strong level of risk-adjusted capitalisation, which is supported by a comprehensive reinsurance programme.
The ratings also consider the captive’s importance within the risk management framework of its parent, energy company, National Grid.
The volatility of NGIC’s operating performance could offset the positive ratings. The captives underwriting results are also subject to considerable volatility, owing to the nature of risks it underwrites.
“Negative rating actions could occur if a poor underwriting performance were to become more frequent in the near future, and/or a material deterioration of risk-adjusted capitalisation were to occur. In addition, a significant deterioration in National Grid’s financial profile would likely lead to a review of NGIC’s ratings,” said the ratings firm.
