AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of 'a-' (Excellent) for
The outlook of these Credit Ratings (ratings) is negative.
These ratings reflect Delvag's balance sheet strength, which AM Best assesses as very strong, its strong operating performance, neutral business profile, appropriate enterprise risk management, as well as rating drag due to its association with the financially weaker parent,
Delvag is the captive insurer for
The captive's balance sheet strength is underpinned by risk-adjusted capitalisation, as measured by Best's Capital Adequacy Ratio (BCAR), which remained at the strongest level at year-end 2020. AM Best expects the captive's prospective risk-adjusted capitalisation to be maintained at the strongest level further supported by a profit and loss absorption agreement with
Delvag has a good historical earnings track record, as demonstrated by a five-year weighted average operating ratio of 72% (2016-2020), as calculated by AM Best, supported by a good balance of underwriting and investment income. Delvag recorded strong and improved technical performance in 2020, as demonstrated by a combined ratio of 93% (as calculated by AM Best), compared with 99% in the prior year. AM Best expects the company to maintain this improved level of underwriting performance following remedial actions undertaken in 2020 on underperforming lines of business, as well as partial discontinuation of non-group-related reinsurance business.
Delvag's profile is enhanced by its strategic importance to and integration within the
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.
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