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 Rembrandt
Insurance Company, Ltd. (Rembrandt) (Bermuda). The outlook of
these Credit Ratings (ratings) remains stable.
Rembrandt is a captive (re)insurer of Vitol Holding B.V. (Vitol), a
holding company of a group engaged principally in trading
petroleum-related products and commodities.
The ratings reflect Rembrandt’s balance sheet strength, which A.M. Best
categorises as very strong, as well as its strong operating performance,
limited business profile and appropriate enterprise risk management.
Rembrandt’s balance sheet strength is underpinned by risk-adjusted
capitalisation at the strongest level, as measured by Best’s Capital
Adequacy Ratio (BCAR). A.M. Best expects Rembrandt’s risk-adjusted
capitalisation to remain at the strongest level, supported by low net
underwriting leverage and an outward reinsurance programme that is
placed with a panel of financially strong reinsurers. Partly offsetting
factors in the balance sheet strength assessment include the captive’s
reliance on reinsurance and its concentrated asset base, with a loan
provided by Rembrandt to the Vitol group that represented 53% of the
captive’s total assets at year-end 2017 (2016: 59%). The risks
associated with this loan are mitigated somewhat by terms that allow it
to be redeemed at short notice.
Rembrandt’s strong operating performance is demonstrated by its
five-year average return on capital of 13.2% (2013-2017) and is
primarily driven by its excellent underwriting results, with a five-year
average combined ratio of 15.7% (2013-2017). Operating results are
further supported by stable, albeit modest, investment returns.
Rembrandt’s business profile assessment of limited reflects the
company’s relatively small insurance portfolio, which is concentrated by
product. Approximately 90% of the captive’s premiums derive from marine
cargo and liability risks. Over the past five years, Rembrandt’s premium
revenue has declined at an average annual rate of approximately 11%,
adversely affected by the soft rate environment and low oil prices.
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.
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