AM Best has affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of Net Insurance S.p.A. (Net Insurance) (Italy). The outlook of these Credit Ratings (ratings) is stable. Concurrently, AM Best has withdrawn these ratings as the company has requested to no longer participate in AM Best’s interactive rating process.

The ratings reflect Net Insurance’s balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

The balance sheet strength assessment of adequate reflects Net Insurance’s risk-adjusted capitalisation, which is at the strongest level at year-end 2022, as measured by Best’s Capital Adequacy Ratio (BCAR). Offsetting factors are the composition of Net Insurance’s investment portfolio, which includes material exposure to Italian sovereign debt, and the company’s small capital base, which increases the potential for volatility in risk-adjusted capitalisation. Dependence on reinsurance is high, although the risks associated with this dependence are mitigated partially by the excellent credit quality of the company’s reinsurance panel.

Net Insurance’s operating performance is supported by robust underwriting results, consistently positive in the past seven years. Notwithstanding extraordinary expenses incurred in 2022, the company delivered a profit after taxes of EUR 8.4 million (2021: EUR 11.3 million). AM Best expects prospective performance to remain positive, underpinned by technical profitability.

Net Insurance has a leading profile as a specialist in Italy’s Cessione del Quinto (CQ) loan insurance market. The company leverages its expertise and innovative approach to compete against the CQ market’s larger players. AM Best considers the company’s narrow focus and geographic concentration to be offsetting factors in the business profile assessment.

AM Best assesses Net Insurance’s ERM as appropriate. The company’s ERM framework includes a clear risk appetite and risk tolerance statements, as well as appropriate control systems.

The ultimate parent of Net Insurance is Poste Italiane S.p.A. (Poste Italiane), the Italian postal service provider, and no rating lift or drag is applied to Net Insurance’s ratings from Poste Italiane’s credit profile.

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