AM Best Affirms Credit Ratings of Palms Insurance Company, Limited
11 Maio 2022 - 5:03PM
Business Wire
AM Best has affirmed the Financial Strength Rating of A
(Excellent) and the Long-Term Issuer Credit Rating of “a”
(Excellent) of Palms Insurance Company, Limited (Palms) (George
Town, Cayman Islands). The outlook of these Credit Ratings
(ratings) is stable.
The ratings reflect Palms’ balance sheet strength, which AM Best
assesses as strongest, as well as its adequate operating
performance, neutral business profile and appropriate enterprise
risk management.
Palms is a single-parent insurer wholly owned by NextEra Energy
Capital Holdings, Inc. (NEECH), which in turn is wholly owned by
NextEra Energy, Inc. (NextEra) [NYSE: NEE]. Palms underwrites
insurance risks primarily from NextEra and its affiliates,
providing specialized direct and assumed property, casualty,
workers’ compensation, automobile liability and employers’
liability coverages. Palms also provides property and casualty
insurance to select non-affiliated entities.
The ratings reflect Palms’ solid risk-adjusted capitalization,
as measured by Best’s Capital Adequacy Ratio (BCAR), consistent
positive operating performance and conservative balance sheet
strategies, as well as its strong management and significant role
within the risk management structure of its parent, NEECH. The
ratings also recognize Palms’ history of maintaining sufficient
capital and financial resources to support its ongoing
obligations.
Palms provides coverage primarily for the energy and utility
industry and has high net loss potential stemming from a single,
severe occurrence relative to its surplus. This is mitigated
somewhat by Palms’ excellent loss history, its favorable geographic
spread of risk and historically strong surplus position.
Additionally, while Palms partially relies on third parties for
processing, servicing and administration, Palms’ management is
involved closely in these operations.
Palms has expanded and enhanced its underwriting structure with
necessary talent and expertise to support the expansion into
non-affiliate business. Although Palms participates in a range of
coverages of its parent company for very large risks, these risks
are underwritten with tight guidelines and significant loss control
measures by the insured affiliates, as evidenced by favorable loss
ratios over the past five years. Prospective underwriting
performance still remains subject to volatility, due to Palms’
exposure to low frequency, high severity claims in its property
program, which includes coverage for NextEra’s renewable energy
interests and other non-affiliate coverage.
AM Best remains the leading rating agency of alternative risk
transfer entities, with more than 200 such vehicles rated in the
United States and 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 Performance Assessments, 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 specializing 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.
Copyright © 2022 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Fred Eslami Associate Director +1 908 439 2200, ext.
5406 fred.eslami@ambest.com
Dan Teclaw Associate Director +1 908 439 2200, ext.
5394 dan.teclaw@ambest.com
Christopher Sharkey Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Jeff Mango Managing Director, Strategy &
Communications +1 908 439 2200, ext. 5204
jeffrey.mango@ambest.com
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