AM Best affirms Enel Re ratings

AM Best has affirmed the financial strength rating of A- and the long-term issuer credit rating of “a-” of Enel Reinsurance - Compagnia di Riassicurazione (Enel Re), a captive of Enel, a multinational electric utility company based in Italy. The outlook of these ratings is stable.

The rating agency said that the ratings reflect Enel Re’s balance sheet strength, which it assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

AM Best expects Enel Re’s risk-adjusted capitalisation to be maintained at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The captive benefits from good liquidity and low reinsurance dependence. An offsetting rating factor is Enel Re’s potential exposure to large losses given its high net retention per risk, which has the potential to introduce volatility in capitalisation levels.

Enel Re’s operating performance assessment reflects AM Best’s expectation that the prospective combined ratio will remain within the captive’s through-the-cycle target of between 95% and 100%. Solid investment income is expected to contribute positively to overall profitability.

Enel Re is the captive insurer of Enel S.p.A. group. The captive is well-integrated within the Enel group and plays a fundamental role in managing the group’s risk exposures. On Jan. 1, 2024, Enel’s old captive, Enel Insurance N.V., transferred its assets and liabilities to Enel Re, through a cross-border merger. The aim of the transaction was to redomicile the captive operation of Enel to Italy, where the group is based. Enel Insurance N.V. ceased to exist as a result of the cross-border merger.

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