OLDWICK, NJ–(GOOD WIRE)–
AM Best has confirmed the Financial Strength of A (Excellent) and the Long Term Credit Rating of “a+” (Good) of Electric Insurance Company (EIC) (Beverly, MA). The loan format (parts) is fixed.
These ratings reflect the strength of EIC’s paper, which AM Best considers very strong, as well as its operational efficiency, neutral business history and sound business management. These ratings also take into account the insurance coverage offered by their parent, General Electric Company (GE) and the importance of EIC’s strategies for success. GE.
EIC standards reflect an assessment of balance sheet strength driven by risk-adjusted capitalization at the highest level of strength, as measured by Best’s Capital Adequacy Ratio (BCAR). The EIC rating also reflects the company’s performance in terms of calendar and risk year development, revenue growth, cash flow management and current cash flow. The company also offers marketing solutions GEand personal communications for current and former GE employees, as well as the general public.
Lessening these good things is reducing the EIC business and owning it GE as the sole policyholder. However, most of the company’s business lines are priced in reverse, resulting in lower risk and more stable profitability. Although premium rates in commercial policies can limit an insurance company’s earnings, they can also protect the company from heavy losses by allowing it to recoup losses by adjusting premiums. Although EIC’s largest business is workers’ compensation, it has a small number of criminal cases. Due to the divestiture process of GE, EIC’s premium and reserve levels have continued to decline. In 2021, initial and reserve costs decreased by 16% and 31%, respectively, from the levels of 2017. While EIC’s exposure has decreased, the company has returned more money as part of the stockholder’s distribution to their parent. AM Best is closely monitoring the parent’s earnings and the decline in residual income, and has not seen a significant decline in BCAR’s business as a result of this activity.
In May 2021EIC sold its shares Ireland– permanent subsidiary, Electric Insurance Ireland Designated Activity Company (EIIDAC), which assigned responsibility to employers and all liabilities GE in Europe. GE’s European coverage is now included in GE’s global program through third-party commercial insurance.
In November 2021, GE announced its plans to split into three companies focused on aviation, healthcare and energy. There are no changes to the current EIC structure in the short term. While the transition will take several years to complete, EIC will continue to focus on supporting GE’s businesses and growing its successful business.
AM Best continues to be the leader in other risk assessment agencies, with over 200 such vehicles rated. United States and all over the world. For the latest information on Best Credit Ratings and independent data on the captive insurance market and other risk management strategies, please visit www.ambest.com/captive.
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Chul Hyung Lee
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Source: AM Best