AM Best upgrades ratings of AES Corp captive

AM Best has upgraded the financial strength rating of Vermont-based AES Global Insurance Company (AGIC) from B+ (Good) to B++ (Good).

AGIC is wholly owned by AES Corporation, a power company that owns a portfolio of electricity generation and distribution businesses operating in 16 countries.

The ratings are stable, and according to AM Best reflect AGIC’s continued favourable operating trends and adequate risk-adjusted capitalisation, sound risk management capabilities with a focus on sustaining good capitalisation, underwriting performance and conservative balance sheet strategies.

The ratings also consider AGIC’s important role as a single-parent captive and the implied support provided by its parent, AES Corp.

Partially offsetting these positive rating factors is AGIC’s exposure to large losses due to the policy limits offered, its limited market scope and limited business profile being solely dependent on the parent company’s business opportunities for its growth prospects.