Rating agency AM Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a” of Palms Insurance Company.
Based in the Cayman Islands, Palms is a captive insurer wholly owned by NextEra Energy Capital, a subsidiary of NextEra Energy.
The outlook for each rating remains stable with the ratings reflecting Palms’ excellent risk-adjusted capitalisation, history of consistently strong operating performance and conservative balance sheet strategies.
Additionally, the ratings reflect the captive’s strong integration within the risk management structure of its parent, according to the rating agency. The ratings also recognise Palms’ history of maintaining sufficient capital and financial resources to support its ongoing obligations.
“Partially offsetting these positive rating factors are Palms’ limited market scope and high net loss potential stemming from a single, severe occurrence relative to surplus,” said the rating agency.
“Nevertheless, this is somewhat mitigated by the company’s excellent loss history, favorable geographic spread of risk and the history of support of Palms’ strong surplus position by its parent. Additionally, while Palms depends on third parties for processing, servicing and administration, the senior management of its ultimate parent, NextEra Energy, is closely involved in these operations.”
Palms accepts insurance risks only from NextEra Energy and its affiliates, providing specialised direct and assumed property and casualty coverages, workers’ compensation, automobile liability, employers’ liability and property risk.
AM Best, Ratings, Cayman Islands, Palms Insurance Company, NextEra Energy Capital, Risk management, North America