A.M. Best has affirmed the financial strength rating of A (Excellent) and the long-term issuer credit rating of “a” of Eni Insurance Designated Activity Company (EID), based in Ireland.
EID is a captive for Eni S.p.A. (Eni), a multinational energy company based in Italy.
The outlook of these credit ratings is stable.
The ratings reflect EID’s balance sheet strength, which A.M. Best categorises as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).
EID’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), is categorised as strongest, and is expected to remain at the strongest level over the medium term, according to A.M. Best.
The rating firm explained that an offsetting rating factor in the balance sheet assessment is EID’s reliance on reinsurance to write large risks, however, the risks associated with this reliance are mitigated partly by long-standing relationships with reinsurers of excellent credit quality.
EID’s underwriting performance remained strong during the first nine months of 2020 despite the COVID-19 pandemic.
A.M. Best noted that its prospective performance is subject to volatility due to potentially large losses from EID’s property account. However, underwriting volatility should be moderated by the captive’s comprehensive reinsurance programme.
EID is well-integrated within the Eni group’s risk management framework, and has an active role in overseeing and containing the group’s insurance costs.
A.M. Best added: “Additionally, the captive enables the group to centralise claims information and establish effective internal reporting for Eni. EID has a developed ERM framework, with clear risk appetite and tolerance levels in place.”
