OLDWICK, N.J.--(BUSINESS WIRE)--#insurance--AM Best has a-signed a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to Research Insurance Company Limited (RICL) (Bermuda). The outlook a-signed to these Credit Ratings (ratings) is stable. RICL is a captive insurance company wholly owned by Battelle Memorial Institute (BMI), an Ohio-based nonprof..
OLDWICK, N.J.--(BUSINESS WIRE)--#insurance--AM Best has a-signed a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to Research Insurance Company Limited (RICL) (Bermuda). The outlook a-signed to these Credit Ratings (ratings) is stable. RICL is a captive insurance company wholly owned by Battelle Memorial Institute (BMI), an Ohio-based nonprofit corporation and provider of technology-based research, management, commercialization and educational services to government and industry.
The ratings reflect RICL’s balance sheet strength, which AM Best a-sesses as very strong, as well as its adequate operating performance, limited business profile, appropriate enterprise risk management (ERM) and one notch of rating enhancement that it receives from its ultimate parent, BMI.
RICL’s level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), is a-sessed at the strongest level, where AM Best expects it to remain in future years. The balance sheet strength a-sessment also considers the company’s low investment risk profile and organic surplus growth achieved over several years. These factors are offset somewhat by the high loss limit (relative to its surplus) that the captive offers the parent.
Overall, RICL’s operating performance has been profitable as demonstrated by its five-year average combined ratio and net return on revenue measures that exceed AM Best’s commercial composite. Consistent operating profits are attributable to favorable underwriting results, and to a greater extent, solid investment income in each of the past five years which, together, have enabled the captive to grow surplus. Further, RICL’s operating performance reflects the inherent benefits of being a captive insurer as it has minimal acquisition costs and administrative expenses, driving its very favorable expense ratio.
RICL’s business profile is limited, as it writes, mainly on a claims-made basis, products and errors and omissions, umbrella policies for general and employers’ liability, professional liability, property flood deductible buy-down and environmental impairment coverage for its parent and affiliated organizations. RICL is an integral component of BMI’s ERM program as it provides specific insurance coverages to BMI, its subsidiaries and affiliates more efficiently than the traditional market. This strategic role and history in the BMI enterprise justify lift from the parent in the ratings as it indicates a committed level of implicit and explicit support as well as other inherent benefits the captive receives from BMI.
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