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the best The financial strength rating (excellent) and the long-term issuer credit rating of Palms Insurance Company, Limited (Palms) (Georgetown, Cayman Islands) have been confirmed as “a” (excellent). The outlook for these credit ratings (ratings) is stable.
The rating reflects Palm’s balance sheet strength (AM Best considers the strength to be the strongest) as well as its adequate operational performance, neutral business conditions and appropriate corporate risk management.
This rating reflects Palm’s reliable risk-adjusted capital, which is measured by Best’s capital adequacy ratio (BCAR), sustained and stable positive operating performance and conservative balance sheet strategy, as well as its strong management and in the parent company An important role in the risk management structure, NextEra Energy Capital Holdings Limited (NEECH). The rating also recognizes Palms’ history of maintaining sufficient capital and financial resources to support its ongoing obligations.
Palms currently mainly provides insurance for the energy and utility industries. Relative to its surplus, it has a high net loss potential due to a serious emergency. The company’s outstanding loss history, favorable geographical distribution of risks, and Palms’ historically strong earnings position alleviated this situation to a certain extent. In addition, although Palms relies on third parties for processing, maintenance and management, Palms’ management is closely related to these operations.
Palms is a single parent insurance company wholly-owned by NEECH, and NEECH is in turn owned by NextEra Energy, Inc. (NEE) (NYSE:Do not). Palms currently mainly accepts insurance risks from NEE and its affiliates, and provides special direct and assumed property, personal injury insurance, workers’ compensation, automobile liability, and employer liability. Starting in January 2021, Palms also provides insurance to unaffiliated entities. Palms has expanded and enhanced its underwriting structure with the necessary talent and expertise to support the expansion to third-party businesses. Although Palms has participated in the underwriting of a series of major risks of its parent company, these risks have been underwritten by the insured subsidiaries with strict guidelines and important loss control measures, which has shown a good loss ratio in the past five years Prove this. Nevertheless, because Palms faces the risk of low frequency and high stringent claims in its real estate plan, the expected underwriting performance will still fluctuate, including underwriting of NEE renewable energy rights and newer third-party underwriting.
AM Best is still the leading rating agency for alternative risk transfer entities, with more than 200 such instruments rated in the United States and globally.To learn about the latest 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 is related to the credit rating published on the AM Best website.For all rating information related to the issuance and related disclosures, including details of the office responsible for issuing each rating referenced in this issue, please refer to AM Best’s Recent rating activity Web page.For additional information on the use and restrictions of credit rating opinions, please see The best credit rating guide.For information on the proper use of Best’s credit ratings and AM Best press releases, please review Media Guide-Use Best Credit Rating and AM Best Rating Action Press Release Correctly.
AM Best is a global credit rating agency, news publisher and data analysis provider specializing in the insurance industry. The company is headquartered in the United States, has operations in more than 100 countries, and has regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.For more information, please visit www.ambest.com.
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