12 October 2022Analysis

AM Best affirms ORIAS ratings

AM Best affirmed the financial strength rating (FSR) at A- and long-term issuer credit rating at a- for Ørsted Insurance A/S (ORIAS).

The forecast of these credit ratings is stable.

AM Best said that these ratings reflect ORIAS’ balance sheet strength, which it assesses as very strong, as well as its sound operating performance, neutral business profile and sound enterprise risk management.

ORIAS is the captive commercial property insurer of Ørsted, a Danish-headquartered global sustainable energy group.

The very strong assessment of ORIAS’ balance sheet strength is underpinned by its risk-adjusted capitalisation, which is well above the level required for the strongest assessment as measured by Best’s capital adequacy ratio. The company also benefits from a very conservative and liquid investment portfolio.

Compensating factors in the valuation include the company’s high reliance on reinsurance, although the risks associated with this reliance are partly mitigated by ORIAS’s longstanding relationship with a highly valued reinsurance commission.

As a captive monoline insurance company providing commercial property coverage for Ørsted, ORIAS’s underwriting portfolio is concentrated in commercial property insurance but is well diversified geographically. The neutral rating of ORIAS’s business profile also reflects its strategic importance to Ørsted.