AM Best affirmed the financial strength rating of A (Excellent) and the issuer’s long-term credit rating of “a” (Excellent) from
The ratings reflect the strength of EICL’s balance sheet, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate management of business risks.
EICL’s risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), remained at the highest level and is supported by low net underwriting leverage, a very conservative investment portfolio and liquid assets and comprehensive reinsurance agreements. Although the company’s capital and surplus has shown a slight downward trend over the past three years due to dividend payments to its parent companies (
EICL has a proven track record of strong underwriting and operating performance, thanks to its group-related activities. Given its risk profile of high severity and low frequency, which mainly concerns maritime and aeronautical activities, the company has ceded more than half of its premiums to a panel of financially solid reinsurers and has maintained a low retention rate. The company’s net loss experience has been very favorable in recent years, while gross losses have fluctuated due to a few major marine and aviation hull losses. EICL faced investment headwinds in 2021 due to its cash and deposit-only investment portfolio. Going forward, AM Best expects underwriting results, particularly for its marine business, to continue to be the primary driver of its bottom line.
As a pure captive of
Negative rating actions could occur if there is a significant deterioration in the operating performance of the business such that it no longer supports the strong rating, or if there are significant installments of capital or dividends that result in a substantial decline in EICL’s risk-adjusted capitalization. In addition, negative rating actions could arise in the event of a material deterioration in the credit profile of its ultimate parent,
AM Best remains the leading rating agency for alternative risk transfer entities, with more than 200 such vehicles rated worldwide. For current Best credit ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.
Ratings are communicated to rated entities before publication. Unless otherwise indicated, the ratings have not been changed as a result of this communication.
This press release relates to credit ratings that have been published on AM Best’s website. For all rating information relating to the release and relevant disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Assessment Activity Web page. For more information on the use and limits of the credit score notice, please consult Best Credit Score Guide. For more information on the proper use of Best’s Credit Scores, Best’s Performance Ratings, Best’s Preliminary Credit Ratings, and AM Best’s press releases, please see Guide to Proper Use of Best’s Ratings and Reviews.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Based at
Copyright © 2022 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
src=”https://cts.businesswire.com/ct/CT?id=bwnewssty=20221109005670r1sid=acqr8distro=nxlang=fr” style=”width:0;height:0″ />
Show source version on businesswire.com: https://www.businesswire.com/news/home/20221109005670/en/
Associate Director
+852 2827 3418
[email protected]
Manager, Public Relations
+1 908 439 2200 ext. 5159
[email protected]
Senior Manager, Analytics
+852 2827 3413
[email protected]
Communications Specialist
+1 908 439 2200 ext. 5098
[email protected]
Source: AM Best