A.M. Best has affirmed the financial strength rating of ‘A (Excellent)’ and the issuer credit rating of “a” of National Grid Insurance Company (NGICL), a captive of National Grid plc.
According to A.M. Best, the ratings reflect NGICL’s strong risk-adjusted capitalisation, as its importance as a risk management tool within the NG group. In addition, the ratings reflect NGICL’s strong but volatile earnings track record. The outlook for both ratings remains stable.
A.M. Best believes that NGICL’s risk-adjusted capitalisation will remain very strong, supported by the captive’s low underwriting leverage ratio and comprehensive catastrophe reinsurance protection.
Prospective underwriting performance remains subject to volatility, due to the captive’s exposure to low frequency, high severity losses in property damage and business interruption accounts, said A.M. Best.
The captive has a track record of strong technical performance, reflecting a five-year average combined ratio of approximately 31 percent, according to A.M. Best.
The ratings company believes that NGICL remains core to NG’s risk management strategy as its principal captive. It is well integrated into the parent’s overall risk management framework, with its primary objective to mitigate NG group’s European exposure to casualty, property damage and business interruption risks.
