HONG KONG--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of INPEX Insurance, Ltd. (IIL) (Bermuda). The outlook for each rating remains stable.
The rating affirmations reflect IIL’s strong risk-adjusted capitalization and favorable operating performance, with an improving trend over the past three years. IIL’s ratings also reflect its affiliation with INPEX CORPORATION (INPEX), to which it remains important as a risk management tool for the parent company. IIL is a single-parent captive of INPEX and provides marine and energy coverage globally to the parent and its affiliates.
Although IIL’s risk-adjusted capitalization decreased in 2015, it remains strong and supports the current ratings primarily due to the company’s conservative risk appetite and strong retrocession panel. Also, favorable operating results in recent years have helped IIL effectively manage its retrocession program.
A partially offsetting rating factor is INPEX’s weakening credit profile primarily due to the prevailing downturn in the oil and gas markets. Also, IIL is potentially exposed to large reinsurance credit risk, as it writes sizeable gross risks relative to its capital. Positive rating actions could occur if IIL continues to produce favorable earnings and maintains its strong level of risk-adjusted capitalization, along with an improved credit profile of the parent. Negative rating actions could occur if there is a material shift in risk appetite, which could potentially undermine the stability in IIL’s profitability and balance sheet strength. In addition, significant deterioration in INPEX’s credit profile could place downward pressure on IIL’s ratings.
A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2016 by A.M. Best Rating Services, Inc. ALL RIGHTS RESERVED.
