AM Best has affirmed the financial strength rating of ‘A’ (Excellent) and long term issuer credit rating of ‘a’ for Rembrandt Insurance Company, Ltd, the Bermuda captive owned by Vitol Holding B.V.
Vitol is a Dutch multinational energy and commodity trading company with the captive primarily underwriting the marine cargo and liability risks of the group.
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.
“AM Best expects Rembrandt’s risk-adjusted capitalisation to remain comfortably at the strongest level, supported by low net underwriting leverage, an outward reinsurance programme that is placed with a panel of financially strong reinsurers and excellent internal capital generation,” the ratings agency stated.
“Partly offsetting factors in the balance sheet strength assessment include the captive’s moderate reliance on reinsurance and its concentrated asset base, with a loan provided by Rembrandt to Vitol, which represented approximately half of the captive’s total investments at year-end 2022.”
The captive has delivered a weighted average return on equity of 24.2% over the past five years (2018-2022), and an impressive five-year weighted average combined ratio of 35.3%.
“Revenues and earnings benefitted from higher and more volatile oil and gas prices in 2022, with the company’s gross written premium nearly doubling during the year and after-tax profit increasing by 195%,” AM Best added.
“Profitability is expected to moderate over the medium term, as oil and gas prices stabilise.”