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PRESS RELEASE from provider: Business Wire
This content is a press release from our partner Business Wire. The AP newsroom and editorial departments were not involved in its creation.

AM Best Affirms Credit Ratings of Nuclear Electric Insurance Limited

February 28, 2019

OLDWICK, N.J.--(BUSINESS WIRE)--Feb 28, 2019--AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” of Nuclear Electric Insurance Limited (NEIL) (Wilmington, DE). The outlook of these Credit Ratings (ratings) remains stable.

The ratings reflect NEIL’s balance sheet strength, which AM Best categorizes 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.

Partially offsetting these positive rating factors are the company’s primary focus on property catastrophe risks and related business interruption claims, with the subsequent financial stress this could cause in the unlikely event of two full-limit losses. Despite the 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. However, these factors are reflective of a captive insurer focused on a particular niche market supported by its members. Nonetheless, NEIL’s risk management program is designed to manage risks within the company’s defined tolerance levels. NEIL also maintains a comprehensive loss prevention program, with a specialized, effective loss prevention department working together with insured members to control losses. NEIL’s loss prevention effort is supported by a panel of employed and contract nuclear engineers.

The ratings also recognize NEIL’s history of maintaining sufficient capital to support its ongoing obligations, which includes its financial flexibility to suspend policyholder distributions. NEIL also has the contractual right to assess a retrospective premium for 10 times each member’s annualized premium, which strengthens the company’s financial flexibility. This facility has never been used.

A key rating driver that could lead to positive rating action is profitability in underwriting results over the long term.

Key rating factors that could lead to a downgrade of the company’s ratings over the longer term include increased leverage, substantial increases in losses and significant erosion of capital or loss of members.

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 Understanding Best’s Credit Ratings . For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases .

AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com:https://www.businesswire.com/news/home/20190228005941/en/

CONTACT: Guilherme Monteiro Simoes

Senior Financial Analyst

+1 908 439 2200, ext. 5301

guy.simoes@ambest.comSteven M. Chirico, CPA

Director

+1 908 439 2200, ext. 5087

steven.chirico@ambest.comChristopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.comJim Peavy

Director, Public Relations

+1 908 439 2200, ext. 5644

james.peavy@ambest.com

KEYWORD: UNITED STATES EUROPE NORTH AMERICA NEW JERSEY

INDUSTRY KEYWORD: PROFESSIONAL SERVICES INSURANCE

SOURCE: AM Best

Copyright Business Wire 2019.

PUB: 02/28/2019 03:16 PM/DISC: 02/28/2019 03:17 PM

http://www.businesswire.com/news/home/20190228005941/en