The rating affirmations reflect Emani’s strong risk-adjusted capitalisation, its strong specialist business profile in the nuclear energy sector, as well as its excellent, albeit volatile, earnings track-record, underpinned by a five-year average operating ratio of 38%. Prospective performance remains subject to volatility as the mutual’s claims profile is dominated by an infrequent number of low to mid-size losses.
Partially offsetting these strengths is Emani’s exposure to low frequency, high severity losses and the potential for capital depletion following a full-limit loss. This risk is somewhat mitigated by an extensive reinsurance programme, which is placed with a panel of financially strong reinsurers. Additionally, Emani has a contractual right to assess a retrospective premium for six times each member’s annualised premium contribution. Strong underwriting guidelines and extensive loss control management, as well as high risk management standards within the nuclear energy industry, also moderate risk exposure.
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