The financial strength rating of A (Excellent) and long-term issuer credit rating of “a+” of Solen Versicherungen AG (SVAG) and Noble Assurance Company have been affirmed by A.M. Best.
The outlook of these ratings remain stable.
A.M. Best’s ratings are reflective of SVAG’s balance sheet strength, categorised by A.M. Best as strongest, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
SVAG’s balance sheet strength is supported by its risk-adjusted capitalisation being at the very strong level, according to Best’s Capital Adequacy Ratio (BCAR), which is expected to stay at that level, supported by internal capital generation.
The positive holding impact, which reflects SVAG’s affiliation to its ultimate parent, Royal Dutch Shell, to which it remains an important risk management tool.
Shell provides explicit support to SVAG in the form of a contingent capital facility that will allow SVAG to replenish its capital following a series of very large losses.
The captive has a track record of operating performance, mainly driven by robust underwriting results, as demonstrated by a five-year average combined ratio of 35.6 percent.
Prospective performance will be impacted by volatility from exposure to high severity, low-frequency losses, reflecting the type of business underwritten and the captive’s large gross and net maximum line size.
The captive does not purchase outward reinsurance cover for the majority of its risks.
SVAG’s key role as Shell’s principal captive is reflected in its business profile assessment.
Non-life risks mostly consist of offshore and onshore property and liability business, as well as the associated business interruption cover, the captive also reinsures life business emanating from the group’s pension liabilities.
Noble is a member of the SVAG rating unit and a subsidiary of Shell.
The Texas-domiciled captive writes Shell’s US business and cedes 100 percent of its risks to SVAG, which is domiciled in Switzerland, through a quota share reinsurance agreement.
