LONDON, October 27, 2021--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of "a" (Excellent) of Rembrandt Insurance Company, Ltd. (Rembrandt) (Bermuda), a captive (re)insurer of Vitol Holding B.V. (Vitol), a group engaged in the trading of petroleum-related products. The outlook of these Credit Ratings (ratings) is stable.
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). AM Best expects Rembrandt’s risk-adjusted capitalisation to remain 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. 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 that represented approximately a quarter of the captive’s total assets at year-end 2020. The risks associated with this loan are mitigated somewhat by terms that allow it to be redeemed on short notice, along with the good financial condition of Vitol itself.
Rembrandt’s strong operating performance is demonstrated by its five-year weighted average return on capital of 13.7% (2016-2020) and is driven primarily by its good underwriting results, with a five-year weighted average combined ratio of 42.1% over the same period. Operating results are further supported by stable, albeit modest, investment returns.
Rembrandt’s business profile assessment reflects its strategic importance to its parent, as an embedded part of Vitol’s risk management framework; however, the captive covers only a small part of the parent’s insurance needs, writing around 25% of total insurance premiums. In addition, Rembrandt has a concentrated insurance portfolio, with approximately 90% of its premiums derived from marine cargo and liability risks.
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 www.ambest.com/captive.
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 Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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