AM Best has affirmed the Financial Strength Rating (FSR) of A- (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a-” (Excellent) of Ørsted Insurance A/S (ORIAS) (Denmark).
The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect ORIAS’ balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
ORIAS is the captive commercial property insurer for Ørsted A/S (Ørsted), a global sustainable energy group headquartered in Denmark.
ORIAS’ very strong balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, which is significantly above the level required for the strongest assessment, as measured by Best’s Capital Adequacy Ratio (BCAR). The company also benefits from a very conservative and liquid investment portfolio. Offsetting factors in the assessment include the company’s high dependence on reinsurance, although the risks associated with this dependence are partly mitigated by ORIAS’ longstanding relationship with its highly rated reinsurance panel.
The credit rating agency says the adequate operating performance assessment reflects the company’s track record of good but volatile underwriting results. The captive has reported underwriting profits, net of reinsurance, in four of the past five years, benefiting from low claims frequency.
Prospective performance is subject to volatility from the company’s exposure to potentially large property losses, but underwriting volatility is moderated on a net basis by the captive’s comprehensive reinsurance programme.
As a captive monoline insurer providing commercial property insurance covers for Ørsted, ORIAS’ underwriting portfolio is concentrated in commercial property insurance but well-diversified geographically. ORIAS’ neutral business profile assessment also reflects its strategic importance to Ørsted.
