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A.M. Best Affirms Ratings of Rembrandt Insurance Company, Ltd. CONTACTS:
FOR IMMEDIATE RELEASE LONDON, 29 September 2011—A.M. Best Europe – Rating Services Limited has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of “a” of Rembrandt Insurance Company, Ltd. (Rembrandt) (Bermuda), a captive operation of Vitol Holding B.V. (Vitol) (Rotterdam), a global oil trading company. The outlook for both ratings is stable. The ratings reflect Rembrandt’s excellent risk-adjusted capitalisation, strong financial performance and stable business profile. An offsetting factor remains the company’s high concentration in the marine cargo line of business. Rembrandt’s risk-adjusted capitalisation is considered excellent by A.M. Best and is expected to remain so through 2011 and into 2012, supported by substantial retained earnings arising from its profitable operating performance and prudent dividend policy. In 2010, Rembrandt’s capitalisation was further boosted by a 19% increase in retained earnings to USD 140 million. Rembrandt’s risk-adjusted capitalisation also benefits from an extensive reinsurance programme placed with Lloyd’s syndicates and similarly rated companies. After a record result in 2009, Rembrandt’s financial performance remained very strong in 2010, with a net income of USD 28.5 million mainly driven by a robust underwriting result of USD 26.4 million. Investment income increased to USD 2.1 million from USD 1.0 million in 2009, primarily as a result of an increase in the amount of a loan to a parent company from which Rembrandt gets the bulk of its investment revenues, and is expected to remain at a similar level of return in 2011. Rembrandt has a very conservative investment strategy with all investments being held in cash or cash equivalents and the aforementioned callable loan to a parent company. Rembrandt derives the majority of its income from the reinsurance of marine cargo and liability risks, which accounted for 88% of net written premiums in 2010. While the focus on these lines of business represents limited diversification for Rembrandt, this is partially alleviated by the fact that the business relates to a large number of short-term risks (oil shipments) around the world. Rembrandt provided insurance cover for around 3,000 separate oil shipments in 2010, and this broad spread reduces the company’s exposure to the impact of individual natural or man-made events. Rembrandt’s portfolio mix is not expected to significantly change in 2011, as the company’s main strategy is to continue to provide reinsurance cover for the Vitol group’s marine cargo and liability risks. The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilised include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; “Understanding Universal BCAR”; “Rating Members of Insurance Groups”; and “A.M. Best’s Rating Methodology for Captive Insurance Companies”. Methodologies can be found at www.ambest.com/ratings/methodology. In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures:I A.M. Best Europe - Rating Services Limited Supplementary Disclosure. A.M. Best Europe – Rating Services Limited is a subsidiary of A.M. Best Company. Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. Copyright © 2011 by A.M. Best Company, Inc. ALL RIGHTS RESERVED. Reprinted with permission. ### |
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