A.M. Best Affirms Credit Ratings of Palms Insurance Company, Limited
April 25 2018 - 11:25AM
Business Wire
A.M. 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 A.M.
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. Nevertheless, 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 industry it
operates in is fundamentally volatile.
A.M. 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 A.M. 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 A.M.
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 A.M. Best press releases, please view
Guide for Media - Proper Use of Best’s Credit Ratings and A.M.
Best Rating Action Press Releases.
A.M. Best is the world’s oldest and most authoritative
insurance rating and information source. For more information,
visit www.ambest.com.
Copyright © 2018 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/20180425006148/en/
A.M. BestFred Eslami, +1 908-439-2200, ext.
5406Associate Directorfred.eslami@ambest.comorSusan
Molineux, +1 908-439-2200, ext. 5829Associate
Directorsusan.molineux@ambest.comorChristopher Sharkey, +1
908-439-2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy, +1
908-439-2200, ext. 5644Director, Public
Relationsjames.peavy@ambest.com
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