AM Best Revises Outlooks to Positive and Affirms Credit Ratings of Nuclear Electric Insurance Limited and Its Subsidiaries
AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a+” (Excellent) of Nuclear Electric Insurance Limited (NEIL) (Wilmington, DE) and its subsidiaries, Cedar Hamilton Limited (Cedar Hamilton) (Hamilton, Bermuda) and NEIL Overseas Designated Activity Company (NEIL Overseas) (Dublin, Ireland).
The Credit Ratings (ratings) reflect NEIL’s balance sheet strength, which AM Best assesses as strongest, as well as its marginal operating performance, favorable business profile and appropriate enterprise risk management.
The ratings also acknowledge NEIL’s management culture and its exclusive leadership position in the U.S. nuclear power-generating industry. NEIL essentially underwrites the entire nuclear utility property insurance coverage in the United States. NEIL continues with its mission of maintaining the financial strength to cover two full-limit nuclear losses, while promoting nuclear industry risk management and safety practices.
Though NEIL focuses on property catastrophe risks and related business interruption claims, which have the potential to cause significant financial stress in the unlikely event that two full-limit losses occur, the group maintains the strongest level of risk-adjusted capitalization, as measured by Best’s Credit Adequacy Ratio (BCAR), after significant stress testing. The group maintains a high level of financial flexibility through its ability to suspend policyholder distributions and assess a retrospective premium for 10 times each member’s annualized premium. To ensure members’ capitalization is adequate to support such an action, NEIL requires members to maintain an investment grade credit rating or provide collateral. This facility has never been used.
