AM Best has assigned a financial strength rating of “A-” (Excellent) and a long-term issuer credit rating of “a-” (Excellent) to Enel Erre S.p.A. (EE). EE is a single-parent captive of Enel S.p.A. (Enel), an Italian multinational electric utility company. The outlook assigned to these credit ratings is stable. AM Best says the ratings reflect EE’s balance sheet strength, which AM Best assesses as “very strong”. The company also demonstrates an adequate operating performance, a neutral business profile and appropriate enterprise risk management (ERM). On 1 January 2024, Enel’s old captive, Enel Insurance N.V., transferred its assets and liabilities to EE through a cross-border merger. The transaction aims to redomicile the captive operation of Enel to Italy, where the group is based. Going forward, EE will be the new captive insurer of the Enel S.p.A. group. EE will be renamed Enel Reinsurance – Compagnia di riassicurazione S.p.A.. The ratings company expects EE’s risk-adjusted capitalisation to be maintained with a comfortable buffer at the strongest level, as measured by its capital adequacy ratio. The captive benefits from good liquidity and low reinsurance dependence. An offsetting rating factor is EE’s potential exposure to large losses given its high net retention per risk, which has the potential to introduce volatility in capitalisation levels. EE has a developed ERM framework with clear risk appetite and tolerance levels in place, according to AM Best.
