AM Best rates Enel Insurance

Rating agency AM Best has assigned ratings to Enel Insurance, a captive of Italian electric utility company Enel.

Enel Insurance has been assigned a financial strength rating (FSA) of A- (Excellent) and an issuer credit rating of ‘a-’. The outlook assigned to both ratings is stable.

The ratings reflect the Enel Insurance’s robust performance record and strong consolidated risk-adjusted capitalisation. However, the firm also does have relatively high exposure to Italian sovereign bonds, which partially counteract the positive ratings.

The firm is also at risk of incurring substantial underwriting losses, due to its large maximum line size, but this is somewhat mitigated by an extensive reinsurance programme.

“Enel Insurance’s consolidated risk-adjusted capitalisation is likely to remain strong in 2015, underpinned by good internal capital generation and moderate net retention,” said the rating agency.