AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of National Grid Insurance USA Ltd (NGIUSA) (United States), a captive insurer of National Grid plc (NG). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect NGIUSA’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management. The ratings also consider rating enhancement from NGIUSA’s affiliate, National Grid Insurance Company (Isle of Man) Limited, which is the largest captive of the NG group and provides reinsurance support to NGIUSA.

NGIUSA’s balance sheet strength is underpinned by its risk-adjusted capitalisation at the strongest level on a standard basis at fiscal year-end 2025, as measured by Best’s Capital Adequacy Ratio (BCAR). However, AM Best notes that the company’s risk-adjusted capitalisation is materially lower on a catastrophe-stressed basis due to the large net line sizes offered by NGIUSA relative to its capital, which exposes its risk-adjusted capitalisation to potential volatility. The assessment also factors in the company’s high reinsurance dependence, which is mitigated partially by the strong credit quality of the reinsurance panel.

NGIUSA has a track record of strong operating performance, generating a five-year (2021-2025) weighted average return-on-equity ratio of 5.9%. Results over the cycle have been underpinned by good underwriting performance, albeit subject to volatility, as demonstrated by a significant loss resulting in a combined ratio of 189.3% for 2025. The captive reported a healthy five-year (2021-2025) weighted average combined ratio of 59.0%. Prospectively, AM Best will continue to monitor volatility in NGIUSA’s underwriting performance over the longer term, given its high net line sizes relative to its premium base.

AM Best assesses NGIUSA’s business profile as limited, reflecting its small and geographically concentrated portfolio of high-value insurance covers for NG’s assets in the United States. NGIUSA is important strategically to NG given its key role in supporting the group’s risk management strategy, providing a broad range of primarily property damage and business interruption, casualty, and cyber covers to meet the majority of the group’s insurance needs in the United States.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated 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 Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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