EIC and Vision Care LLC, are subsidiaries of Luxottica Group S.p.A. and these companies are the North America-based entities of EssilorLuxottica S.A., the ultimate parent.
AM Best see the EIC's balance sheet strength as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM). The ratings consider EIC's strategic importance to EssilorLuxottica S.A., as well as the comprehensive operational support provided by its parent company.
AM Best expects risk-adjusted capitalization to remain at the very strong level due to sustainable organic capital generation predominantly from retained earnings. The balance sheet strength assessment also reflects EIC's low-risk and highly liquid asset portfolio, as well as favorable operating cash flow. In addition, the company benefits from solid financial flexibility. The ratings also take into consideration the dependence on reinsurance programs and the history of dividend payments.
EIC has a history of strong and stable operating performance and profitability measures that have increased through the third quarter 2020. EIC's return-on-equity ratio has been solid and is expected to remain favorable in the near term. EIC has reported strong premium growth, a trend that is expected to continue in the near term.
The ratings also reflect the organization's established market presence and solid overall market share in the vision care space. Furthermore, EIC is strategically important to EssilorLuxottica S.A's vertical integrated business model as its primary insurance entity. The ratings also consider EssilorLuxottica S.A's well-established global market presence and overall creditworthiness, which supports the insurance operations.