LONDON--(BUSINESS WIRE)--A.M. Best has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of Saturn Insurance Inc. (Saturn) (Burlington, Vermont). Saturn is a captive of BP p.l.c. (BP) (United Kingdom), an integrated global oil and gas company. The outlook for both ratings is stable.
Saturn’s ratings reflect its strong risk-adjusted capitalisation resulting from excellent group reinsurance support and the full retention of after-tax profits. Saturn benefits from low investment risk as it maintains half of its investments in cash or short term deposits, with the remainder loaned back to BP with excellent liquidity conditions. In addition, the ratings also factor in BP’s financial strength and commitment toward Saturn.
Saturn’s strong risk-adjusted capitalisation supports the company’s developing business profile and is able to absorb an increase in underwriting risk. Going forward, it is expected that the company will gradually increase its net risk retention and accept new lines of business. In addition, Saturn benefits from a comprehensive reinsurance agreement with its sister company, Jupiter Insurance Limited.
The importance and integration of the company in BP’s overall risk management framework is also positively reflected in the ratings. In addition, BP’s financial strength and commitment toward Saturn is similarly assessed as a positive rating factor.
Upward rating movements are unlikely at present.
Negative rating actions may arise from a material deterioration of Saturn’s risk-adjusted capitalisation. In addition, a significant increase in the retention levels on Saturn’s current and planned programmes without a commensurate increase in the capital base would likely lead to a review of Saturn'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.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.
This rating announcement has been issued by A.M. Best Europe – Rating Services Limited, which is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
