AM Best Affirms Credit Ratings of Rembrandt Insurance Company, Ltd.

AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of Rembrandt Insurance Company, Ltd. (Rembrandt) (Bermuda), a captive (re)insurer of Vitol Holding B.V. (Vitol), a group engaged in the trading of energy-related products. The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Rembrandt’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

Rembrandt’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best expects Rembrandt’s risk-adjusted capitalisation to remain comfortably at the strongest level, supported by low net underwriting leverage, an outward reinsurance programme that is placed with a panel of financially strong reinsurers and excellent internal capital generation. Partly offsetting factors in the balance sheet strength assessment are the captive’s moderate reliance on reinsurance and an intercompany loan, which although represented approximately 3% of the captive’s total investments at year-end 2023, has been significantly larger in the recent past.

Rembrandt’s strong operating performance is demonstrated by its five-year (2019-2023) weighted average return on equity (ROE) of 39.5%, which has been driven primarily by its excellent underwriting results, represented by a five-year weighted average combined ratio of 15.0% over the same period, as calculated by AM Best. Operating performance in 2023 was exceptionally strong, evidenced by a ROE of 89.6%. The result is attributable to a material reserve release during the year, which lowered the combined ratio to -37.7% in 2023. Operating profitability is projected to normalise in 2024.

Rembrandt’s business profile assessment reflects its strategic importance to its parent. The captive is embedded within Vitol’s risk management framework; however, it covers only part of its parent’s insurance needs. Rembrandt has a concentrated insurance portfolio focused on the core operations of Vitol, with approximately 90% of its premiums derived from marine cargo and liability risks.

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.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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