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 for the ratings is stable.
ORIAS is single parent captive owned by Denmark-headquartered, sustainable energy company Ørsted, providing commercial property and construction insurance for the group.
ORIAS’ underwriting portfolio is concentrated by line of business and is well-diversified geographically.
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.
The adequate operating performance assessment reflects ORIAS’ record of good, but volatile underwriting results, shown by a 10-year average combined ratio of 81.3% (2013-2022).
In 2022, ORIAS reported a net loss of DKK132.5 ($19m), due to unfavourable claims experience combined with adverse reserve developments on prior year claims.
Underwriting performance is expected to improve in 2023, benefiting from higher premium income from new construction projects underwritten by the captive, as well as insurance of a larger share of Ørsted’s operational renewables assets.
The captive’s performance is subject to volatility, resulting from the company’s exposure to potentially large property losses, although this is moderated by the captive’s comprehensive reinsurance programme.