AM Best affirms Enel Insurance

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

The ratings reflect EINV’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

AM Best said that EINV’s balance sheet strength assessment is supported by the strongest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio. The captive benefits from good liquidity and low reinsurance dependence. An offsetting rating factor is EINV’s potential exposure to large losses given its high net retention per risk, which has the potential to introduce volatility in capitalisation levels.

EINV’s operating performance assessment reflects AM Best’s expectations that EINV’s prospective combined ratio will remain within the captive’s through-the-cycle target of between 95% and 100%. In 2022, EINV reported a profit after tax of €5.3 million (2021: €15.8 million). Technical results were modest, with a combined ratio of 99.7% (2021: 83.2%), and non-technical results benefitted from exchange rate gains of €2 million (2021: €3.7 million).

As a single-parent captive, EINV is well-integrated within the Enel group and plays a fundamental role in managing the group’s risk exposures.