AM Best has affirmed the financial strength rating of B++ (Good) and the long-term issuer credit rating of “bbb+” (Good) for Sigurd Rück AG (Sigurd). The outlook of these credit ratings is stable. Sigurd is a Swiss-based captive reinsurer of Saipem — a key part of the group’s risk management framework. AM Best ratings reflect Sigurd’s balance sheet strength, which AM Best assesses as “very strong”, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management. AM Best says “the ratings also factor, in the form of drag, Sigurd’s association with its parent company.” Sigurd’s “very strong” balance sheet strength assessment is underpinned by its risk-adjusted capitalisation at the “strongest” level, as measured by Best’s Capital Adequacy Ratio. AM Best expects Sigurd’s risk-adjusted capitalisation to remain at the strongest level, supported by the captive’s conservative reserving policies. This is in addition to its moderate exposure to catastrophe losses and its comprehensive retrocession programme with well-rated retrocessionaires. A retrocession is a transaction in which a reinsurer cedes to another reinsurer, named the retrocessionaire, as part of the reinsurance the former has assumed. Sigurd’s business profile benefits from geographic and product diversification derived from Saipem’s wide-ranging commercial activities.
