31 March 2021News

AM Best assigns A rating to Cedar Hamilton citing explicit support from parent Nuclear Electric

AM Best has assigned Cedar Hamilton a financial strength rating (FSR) of A (excellent) with a stable outlook.

AM Best also affirmed the FSR of A (excellent) for Cedar Hamilton’s parent company, Nuclear Electric Insurance (NEIL), which also has a stable outlook.

The rating agency rated Cedar Hamilton’s balance sheet strength as strongest, with a marginal operating performance, favorable business profile and appropriate enterprise risk management.

Cedar Hamilton plans to provide specialty lines capacity to NEIL’s members and enjoys explicit financial support from NEIL in the form of an 80 percent intercompany quota share reinsurance agreement and a net worth maintenance agreement.

AM Best noted the inherent volatility in NEIL’s underwriting results, due to the nature of the risks it insures and its associated claims activity, and the financial stress associated with the unlikely event of two full-limit losses. These risks are, however, mitigated by NEIL’s history of maintaining sufficient capital to support its ongoing obligations, AM Best said.