AM Best has affirmed the financial strength rating of A- (excellent) and the long-term issuer credit rating of “a-” (excellent) of Denmark-domiciled Ørsted Insurance A/S (ORIAS). The outlook of these credit ratings is stable.
ORIAS is the captive insurer for Ørsted A/S, a global sustainable energy group headquartered in Denmark.
As a captive monoline insurer providing commercial property and construction cover for Ørsted, ORIAS’ underwriting portfolio is concentrated by line of business but well-diversified geographically.
Prospective performance is expected to remain positive in most years but remains subject to volatility due to the company’s exposure to potentially large property losses, although moderated on a net basis by the captive’s reinsurance programme.
The captive also benefits from a very conservative and liquid investment portfolio.
The ratings reflect ORIAS’ 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.
ORIAS’ very strong balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, which is at the strongest assessment level, as measured by AM Best’s capital adequacy ratio (BCAR).
Offsetting factors in the assessment include the captive’s high dependence on reinsurance, although the risks associated with this dependence are mitigated partially by ORIAS’ relationship with its highly rated reinsurance panel.
The adequate operating performance assessment reflects ORIAS’ track record of good but volatile underwriting results, as demonstrated by a 10-year weighted average combined ratio of 86% (2014-2023).
In 2023, ORIAS reported a net profit of $12.5m which improved compared with the $20.4m net loss reported in 2022, mainly driven by more favourable claims experience.