AM Best Affirms Credit Ratings of Sigurd Rück AG
LONDON--(BUSINESS WIRE)--Dec 20, 2018--AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Sigurd Rück AG (Sigurd) (Switzerland). The outlook of these Credit Ratings (ratings) remains stable.
The ratings reflect Sigurd’s balance sheet strength, which is categorised as very strong by AM Best, as well as its strong operating performance, neutral business profile, and appropriate enterprise risk management (ERM), as well as rating drag due to its association with its parent company, Saipem S.p.A.
Sigurd is the captive reinsurer of Saipem, a global energy solution provider for the energy sector which provides a wide range of services, from engineering to offshore and onshore construction, offshore and onshore drilling, and services in the traditional, as well as in the renewables, decomposition and infrastructure sectors.
AM Best expects Sigurd’s risk-adjusted capitalisation to remain at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), underpinned by internal capital generation. Other factors supporting AM Best’s assessment of balance sheet strength include the captive’s conservative investment and reserving policies, its moderate exposure to catastrophe losses and a comprehensive retrocession programme. Partly offsetting factors include Sigurd’s relatively small capital base, which exposes its risk-adjusted capitalisation to a degree of volatility, and a cash pooling agreement in place with the Saipem group, which creates concentration risk within the company’s asset portfolio.
The company’s strong earnings have been driven by its underwriting account, which has produced a five-year weighted average combined ratio of 54% (2017: 55%). The average five-year return on equity is 17% (2013-2017). Although prospective performance is likely to deteriorate due to decreasing premium rates and declining premium volumes from challenging market conditions affecting the Saipem group, AM Best expects the captive to maintain a strong level of profitability.
AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit .
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 pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s web page. For additional information regarding the use and limitations of Credit Rating opinions, please view . For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view .
Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
View source version on businesswire.com:https://www.businesswire.com/news/home/20181220005509/en/
CONTACT: Luca Patron
+44 20 7397 0304
+44 20 7397 0320
Manager, Public Relations
+1 908 439 2200, ext. 5159
Director, Public Relations
+1 908 439 2200, ext. 5644
KEYWORD: UNITED KINGDOM EUROPE
INDUSTRY KEYWORD: PROFESSIONAL SERVICES INSURANCE
SOURCE: AM Best
Copyright Business Wire 2018.
PUB: 12/20/2018 10:33 AM/DISC: 12/20/2018 10:32 AM