AM Best has affirmed the Financial Strength Ratings of A (Excellent) and the Long-Term Issuer Credit Ratings of “a+” (Excellent) of Solen Versicherungen AG (SVAG) and Noble Assurance Company (Noble) (Texas, United States). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect SVAG’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management. In addition, the ratings factor in rating enhancement from SVAG’s ultimate parent, Shell Plc (Shell), reflecting SVAG’s importance to the group as a well-entrenched risk management tool.

SVAG’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 the captive’s BCAR scores to remain above the minimum required for the strongest assessment, reflecting its strategy to maintain sufficient capital buffers to absorb a series of large losses. The balance sheet strength assessment also factors in a concentration of assets in intragroup investments and the large gross and net line sizes provided by the captive, relative to its capital base.

SVAG has a track record of strong operating performance, underpinned by robust underwriting results, as demonstrated by a five-year (2019-2023) weighted average combined ratio of less than 25%. Prospective operating performance is subject to potential volatility due to the captive’s exposure to high-severity, low-frequency losses, given its large net line sizes relative to its premium base. In addition, the captive is exposed to elevated market risk through its management of the Shell group’s foreign currency warehousing activities, which drives a level of variability in overall earnings. Nonetheless, SVAG’s key performance metrics are expected to remain supportive of a strong assessment over the medium term.

SVAG’s business profile assessment reflects its key role in supporting its ultimate parent’s overall risk management framework, as Shell’s principal captive. The captive’s non-life business mostly consists of offshore and onshore property and liability risks, as well as the associated business interruption cover. SVAG also writes a small book of life business derived from reinsurance of the group’s pension liabilities.

The ratings of Noble reflect its status as a member of the SVAG rating unit and a subsidiary of Shell. As a captive domiciled in Texas, Noble underwrites Shell’s U.S. business and cedes 100% of its risks to SVAG, its sister company, through a quota share reinsurance agreement.

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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