A.M. Best has affirmed the financial strength rating of A (Excellent) and the long-term issuer credit rating of “a” (Excellent) of Rembrandt Insurance Company, the Bermuda-based captive reinsurer of Vitol Holding. The outlook of these credit ratings is stable, according to A.M. Best. The rating agency of alternative risk transfer entities says the ratings reflect Rembrandt’s “very strong” balance sheet, underpinned by the strongest level of risk-adjusted capitalisation as measured by Best’s Capital Adequacy Ratio. A.M. Best expects this to remain at the strongest level owing to low net underwriting leverage, internal capital generation, and an outward reinsurance programme placed with several financially strong reinsurers. However, it is noted that Rembrandt’s balance sheet strength assessment is partially offset by the captive’s “moderate reliance” on reinsurance, as well as a concentrated asset base. The credit ratings are also based on Rembrandt’s strong operating performance, with a five year weighted average return on capital of 13.7 per cent. The captive also has a limited business profile which indicates its strategic importance to parent company Vitol, an energy and commodity trading company, as well as appropriate enterprise risk management, writing approximately 25 per cent of total insurance premiums for Vitol.
