Best Affirms Rembrandt Insurance ‘A’ FSR Rating; Assigns ICR

A.M. Best Co. announced that it has affirmed the financial strength rating of “A” (Excellent) and assigned an issuer credit rating of “a” to Bermuda-based Rembrandt Insurance Company, Ltd., a captive operation of Vitol Holding B.V (Rotterdam), a global oil trading company. The outlook for both ratings is stable.

“The ratings reflect Rembrandt’s strong risk-adjusted capitalisation and solid financial performance, as well as its business concentration on the Vitol group’s risks,” said Best.

The rating agency said it “believes Rembrandt is likely to maintain strong risk-adjusted capitalisation supported by low net exposure after taking account of its comprehensive reinsurance programme placed with secure-rated companies. Retained earnings are likely to increase at a lower rate of approximately 6 percent over the next two years (compared to 36 percent in 2004) as dividends are expected to be paid from 2005 onwards.”

Best also indicated it “expects robust financial performance over the next two years as Rembrandt’s past excellent underwriting performance is likely to be maintained and will continue to be the main driver for pre-tax profits. The excellent combined ratio of 43.6 percent in 2004 is forecast to further improve to approximately 37 percent by 2006 due the increase in net claims reserves expected.”

In conclusion Best noted that “Rembrandt is likely to remain focused on underwriting the Vitol group’s risks, mainly insuring marine cargo and charterers’ liability risks. A.M. Best believes diversification into other lines of business or into third-party risks is unlikely to be significant in terms of premium volume over the next two years.”