AM Best Affirms Credit Ratings of Palms Insurance Company, Limited
April 17 2019 - 10:32AM
Business Wire
AM Best has affirmed the Financial Strength Rating of A
(Excellent) and the Long-Term Issuer Credit Rating of “a” of Palms
Insurance Company, Limited (Palms) (George Town, Cayman Islands).
The outlook of these Credit Ratings (ratings) remains stable.
The ratings reflect Palms’ balance sheet strength, which AM Best
categorizes as strongest, as well as its adequate operating
performance, neutral business profile and appropriate enterprise
risk management.
The ratings reflect Palms’ solid risk-adjusted capitalization,
history of consistently positive operating performance and
conservative balance sheet strategies, as well as its significant
role within the risk management structure of its parent, NextEra
Energy Capital Holdings, Inc. (NEECH). The ratings also recognize
Palms’ history of maintaining sufficient capital and financial
resources to support its ongoing obligations.
Partially offsetting these positive rating factors are Palms’
limited market scope and high net loss potential stemming from a
single, severe occurrence relative to surplus. This is somewhat
mitigated by the company’s excellent loss history, favorable
geographic spread of risk and Palms’ history of strong surplus
position. Additionally, while Palms depends on third parties for
processing, servicing and administration, the senior management of
its ultimate parent, NextEra Energy, Inc. (NEE) [NYSE: NEE], is
closely involved in these operations.
Palms is a single parent or pure captive insurer wholly owned by
NEECH, which in turn is wholly owned by NEE. Palms accepts
insurance risks only from NEE and its affiliates, providing
specialized direct and assumed property and casualty coverages,
workers’ compensation, automobile liability, employers’ liability
and property risk. Although Palms participates in a range of
coverages for very large risks, these risks are underwritten with
tight guidelines and significant loss control measures by the
insured affiliates as evidenced by favorable loss ratios over the
past five years. Nonetheless, prospective underwriting performance
remains subject to volatility, due to exposure to low frequency,
high severity claims in its property program, as the renewable
energy industry that it operates within is fundamentally
volatile.
AM Best remains the leading rating agency of alternative risk
transfer entities, with more than 200 such vehicles rated in the
United States and 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 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20190417005548/en/
Fred EslamiAssociate Director+1 908 439 2200,
ext. 5406fred.eslami@ambest.com
Susan MolineuxDirector+1 908 439 2200, ext.
5829susan.molineux@ambest.com
Christopher SharkeyManager, Public Relations+1
908 439 2200, ext. 5159christopher.sharkey@ambest.com
Jim PeavyDirector, Public Relations+1 908 439
2200, ext. 5644james.peavy@ambest.com
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