Captive Sigurd Rück’s ratings upgraded after owner’s turnaround
The financial strength rating of Swiss captive Sigurd Rück has been upgraded after AM Best recognised improvement in the credit position of its parent company and owner, Italian oil and gas multinational Saipem.
Sigurd Rück’s financial strength rating now sits in the A range, moving from B++ to A-, while its credit rating has improved from bbb+ to a- with a stable outlook.
AM Best said Sigurd’s balance sheet and operating performance is very strong and that the captive also conducts appropriate enterprise risk management.
It further explained that the strategic turnaround plan implemented by parent company Saipem in 2022 has impacted Sigurd’s ratings. Saipem received a €2bn capital injection from its shareholders after disclosing a material loss in 2022, with Sigurd serving as an important risk management tool for Saipem.
“AM Best expects Sigurd’s risk-adjusted capitalisation to remain comfortably at the strongest level, supported by moderate exposure to catastrophe losses and a comprehensive retrocession programme with retrocessionaires of superior credit quality,” the rating agency said. However, it noted Sigurd’s exposure to concentration and credit risk from a cash-pooling agreement with Saipem, under which Sigurd allocates 52.9% of its total assets and 61.6% of its surplus.
