AM Best has affirmed the financial strength rating of ‘A-‘ (excellent) and the long-term issuer credit rating of “a-” (excellent) of Italy-domiciled Enel Reinsurance – Compagnia di Riassicurazione S.p.A. (Enel Re).
The parent of the captive is Enel S.p.A. a multinational electric utility company based in Italy.
In November 2023, Enel Re became the first captive to be domiciled in Italy, with the captive managed by SRS.
The captive is well-integrated within the Enel group and plays a fundamental role in managing the group’s risk exposures.
On 1 January 2024, Enel’s old Netherlands-domiciled captive, Enel Insurance N.V., transferred its assets and liabilities to Enel Re, through a cross-border merger.
The aim of the transaction was to redomicile the captive operation of Enel to Italy, where the group is based.
Enel Insurance N.V. ceased to exist as a result of the cross-border merger.
The ratings reflect Enel Re’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 expects Enel Re’s risk-adjusted capitalisation to be maintained at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR).
The captive benefits from good liquidity and low reinsurance dependence, though an offsetting rating factor is Enel Re’s exposure to large losses given its high net retention per risk.
Enel Re’s operating performance assessment reflects AM Best’s expectation that the prospective combined ratio will remain within the captive’s through-the-cycle target of between 95% and 100%.
AM Best said solid investment income is expected to contribute positively to overall profitability.