A.M. Best Affirms NEIL's Financial Strength and Issuer Credit Ratings

A.M. Best has affirmed the A (excellent) financial strength rating and the A+ long-term issuer credit rating of Nuclear Electric Insurance Limited (NEIL).

The outlook of both ratings remains stable, the rating agency said, and reflect NEIL's balance sheet strength as well as its marginal operating performance, favorable business profile, and appropriate enterprise risk management. A.M. Best said the ratings also acknowledge NEIL's management culture and its exclusive leadership position in the US nuclear power-generating industry.

A.M. Best noted that NEIL essentially underwrites the entire nuclear utility property insurance coverage in the United States. In addition to maintaining the financial strength to cover two full-limit nuclear losses, NEIL promotes industry risk management and safety practices.

The rating agency noted that NEIL's positive rating factors are partially offset by the company's primary focus on property catastrophe risks and related business interruption claims, with the subsequent financial stress that could result from two full-limit losses. "Despite recent positive results, the company remains exposed to volatility in underwriting results given the nature of the risks it insures and because of claims activity, which relates to the fact that it relies on one market and two principal product lines," A.M. Best said in the rating announcement.

Such factors are inherent in captive mutual insurers focused on a particular niche market supported by its members, A.M. Best said. But NEIL designed its risk management program to manage risks within defined tolerance levels and maintains a comprehensive loss prevention program working closely with insured members to control losses.

NEIL is located in Wilmington, Delaware, and insures domestic and international nuclear utilities for the costs associated with accidental interruptions, damages, contamination, and related nuclear risks. It was formed in 1980 to issue excess property and accidental outage policies. NEIL moved to Delaware in 1988. Nuclear Mutual Limited was merged into NEIL in 1997.