AM Best has affirmed the financial strength rating of ‘A’ (excellent) and the long-term issuer credit rating of “a” (excellent) of Bermuda-domiciled Rembrandt Insurance Company.
Rembrandt is a captive (re)insurer of Vitol Holding B.V., a group engaged in the trading of energy-related products. The outlook for the ratings is stable.
The captive has a concentrated insurance portfolio focused on the core operations of Vitol, with approximately 90% of its premiums derived from marine cargo and liability risks.
AM Best expects Rembrandt’s risk-adjusted capitalisation to remain at the strongest level, supported by a low net underwriting leverage, and an outward reinsurance programme that is placed with a panel of financially strong reinsurers.
Partly offsetting factors in the balance sheet strength assessment are the captive’s moderate reliance on reinsurance and an intercompany loan, which represents approximately 3% of the captive’s total investments at year-end 2023.
The ratings reflect Rembrandt’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.
Rembrandt’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR).
The captive’s strong operating performance is demonstrated by its five-year (2019-2023) weighted average return on equity (ROE) of 39.5%, which has been driven primarily by its strong underwriting results.
Operating performance in 2023 was also “exceptionally strong” evidenced by a ROE of 89.6%.