A.M. Best has affirmed the financial strength rating of “A (Excellent)” and the long-term issuer credit rating of “a+” of Nuclear Electric Insurance Limited.
Nuclear Electric Insurance provides the entire nuclear utility property insurance coverage in the US.
The ratings reflect Nuclear Electric Insurance’s capital position, operating strategy, enterprise risk management culture and its position in the US nuclear power generating industry.
Partially offsetting the positive rating factors are the company's primary focus on catastrophic property risks and related business interruption claims, and according to A.M. Best, the financial stress could cause in the unlikely event of two full-limit losses.
A.M. Best said: “Despite the recent positive results, the company has reported volatility in underwriting results in recent years due to claims activity. Nonetheless, Nuclear Electric Insurance Limited’s risk management programme is strong and is designed to manage risks within the company’s defined tolerance levels. Nuclear Electric Insurance also maintains a comprehensive loss prevention programme.”
Offsetting rating factors are the company's reliance on one market and two principal product lines, as well as the earnings volatility. However, the rating agency explained that these factors are reflective of a captive insurer focused on a particular niche market supported by its members.
A.M. Best suggested that profitability in underwriting results over the long term is a key rating driver that could lead to positive rating action.
