AM Best has affirmed the financial strength rating of ‘A’ (excellent) and the long-term issuer credit rating of “a” (excellent) of Ireland-domiciled Eni Insurance Designated Activity Company (EID).
EID is a captive owned by Eni S.p.A. (Eni), a multinational energy company based in Italy.
Last month, Eni S.p.A. established Eni Energy Italy S.p.A. making it the third captive to be domiciled in Italy.
Captive Intelligence understands that the Ireland captive will likely be closed down or run off following the formation of its Italy-domiciled captive.
EID has a track record of strong operating profits, demonstrated by a five-year weighted average combined ratio of 49.4% (2019-2023).
The captive’s underwriting performance has remained strong during the first nine months of 2024.
Prospective performance is subject to volatility due to potential large losses from EID’s property account.
Underwriting volatility on a net basis should be moderated by the captive’s comprehensive reinsurance programme.
The ratings reflect EID’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).
AM Best assesses EID’s risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), and expects it to remain at this level prospectively.
The ratings agency said an offsetting rating factor in the balance sheet strength assessment is EID’s reliance on reinsurance to underwrite large risks, however, these risks are mitigated by long-standing relationships with reinsurers of “excellent” credit quality.
EID is well-integrated within the Eni group’s risk management framework and maintains its active role in overseeing and containing the group’s insurance costs.
“Additionally, the captive enables the group to centralise claims information and establish effective internal reporting for Eni. EID has a developed ERM framework, with a clear risk appetite and tolerance levels in place,” AM Best said.