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A.M. Best Affirms Credit Ratings of Eni Insurance Designated Activity Company
[September 20, 2017]

A.M. Best Affirms Credit Ratings of Eni Insurance Designated Activity Company


A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of "a" of Eni Insurance Designated Activity Company (EID) (Ireland), a captive of Eni S.p.A. (Eni), a multinational oil and gas company based in Italy. The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect EID's strong risk-adjusted capitalisation, robust underwriting performance and strategic importance as a risk management tool to Eni.

EID's risk-adjusted capitalisation was strong at year-end 2016, although it deteriorated from the previous year mainly due to an increase in reserve and credit risks following a large loss reported in December 2016. A.M. Best expects the captive's risk-adjusted capitalisation to strengthen in 2017 and 2018, supported by the expected settlement of the large loss and good internal capital generation. An offsetting rating factor is EID's exposure to peripheral European sovereign bonds, which accounted for approximately 30% of its fixed income portfolio in 2016. Additionally, the captive's reliance on reinsurance to write large risks has been exacerbated further by a material increase in its gross maximum line size for 2017. However, credit risk is mitigated partly by the excellent credit quality of EID's reinsurance panel.

EID has a track record of robust underwriting performance, evidenced by a five-year average combined ratio of approximately 60%. In 2016, the captive reported technical profits of EUR 12 million (2015: EUR 104 million), despite underwriting performance being affected negatively by the large loss. Prospectively, A.M. Best expects EID to achieve strong underwriting results, with a combined ratio below 60% in most years, along with modest investment profits.

EID is well-integrated within the Eni Group's risk management framework and has an active role in overseeing and containing the group's insurance costs. Additionally, the captive enables the group to centralise claims information and establish effective internal reporting for Eni.

A.M. 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 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 © 2017 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.

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