AM Best rates new captive of Eni
AM Best has assigned a financial strength rating of A and a long-term issuer credit rating of “a” to Eni Insurance, a captive of Eni, a multinational energy company based in Italy. The outlook assigned to these ratings is stable.
The ratings reflect EIS’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).
On 1 February 2025, Eni’s former captive, Eni Insurance Designated Activity Company (EID), transferred its assets and liabilities to EIS, through a cross-border merger operation, with the latter becoming the new captive insurer of Eni. The aim of the transaction was to redomicile the captive operation of Eni to Italy, where the group is based. EID ceased to exist as a result of the cross-border merger.
AM Best said that it expects EIS’s risk-adjusted capitalisation to be maintained with a comfortable buffer at the strongest level, as measured by Best’s capital adequacy ratio. An offsetting rating factor in the balance sheet strength assessment is EIS’s reliance on reinsurance to underwrite large risks; however, the risks associated with this reliance are mitigated by long-standing relationships with reinsurers of excellent credit quality.
EIS’s prospective performance is expected to be strong, in line with the historical performance of EID, evidenced by a five-year weighted average combined ratio of 49.4% (2019-2023), as calculated by AM Best. Prospective performance is subject to volatility due to potential large losses from the property account. However, underwriting volatility on a net basis should be moderated by the captive’s comprehensive reinsurance programme.
“As a single-parent captive, EIS is well-integrated within Eni’s risk management framework and maintains its active role in overseeing and containing the group’s insurance costs,” said AM Best in a statement. “Additionally, the captive enables the group to centralise claims information and establish effective internal reporting for Eni.”
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