LONDON–(BUSINESS WIRE)–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) (Ireland), a captive
of Eni S.p.A. (Eni), a multinational energy company based in Italy. The
outlook of these Credit Ratings (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
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. An offsetting rating
factor in the balance sheet assessment is EID’s exposure to peripheral
European sovereign bonds, which accounted for approximately 22% of its
fixed income portfolio in 2017, down from 30% in 2016. Additionally, the
captive is reliant on reinsurance to write large risks. Although this
reliance has been exacerbated in 2017 by another material increase in
its gross maximum line size, associated credit risk is mitigated partly
by the excellent quality of EID’s reinsurance panel.
EID has a track record of strong operating profits, evidenced by a
five-year average combined ratio of approximately 56% (2013-2017). In
2017, EID produced a pre-tax profit of EUR 40 million (2016: EUR 19
million), underpinned by a robust underwriting result. The combined
ratio was excellent at 49%, an improvement compared to the combined
ratio of 85% for 2016, which was negatively affected by a large loss.
Prospective performance is subject to volatility due to potential 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. 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.
A.M. Best remains the leading rating agency of alternative risk
transfer entities, with more than 200 such vehicles rated throughout the
world. For current Best’s Credit Ratings and independent data on the
captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.
This press release relates to Credit Ratings that have been published
on A.M. Best’s website. For all rating information relating to the
release and pertinent disclosures, including details of the office
responsible for issuing each of the individual ratings referenced in
this release, please see A.M. Best’s Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view Understanding
Best’s Credit Ratings. For information on the proper media
use of Best’s Credit Ratings and A.M. Best press releases, please view Guide
for Media – Proper Use of Best’s Credit Ratings and A.M. Best Rating
Action Press Releases.
A.M. Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit www.ambest.com
for more information.
Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.
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