LONDON--(BUSINESS WIRE)--A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Saturn Insurance Inc. (Saturn) (Burlington, VT). Saturn is a captive of BP p.l.c. (BP), an integrated global oil and gas company. The outlook of these Credit Ratings (ratings) remains stable.
The affirmation of the ratings reflects Saturn’s excellent risk-adjusted capitalisation and track record of good operating performances since its incorporation (2011). In addition, the ratings consider Saturn’s affiliation with and importance to its ultimate parent, BP.
A.M. Best expects Saturn’s risk-adjusted capitalisation to remain strong. Saturn’s capital base has grown by 43% since 2011, with no dividends paid out in this period. Going forward, A.M. Best expects Saturn to continue to manage its risk-adjusted capitalisation at a strong level, although a decline from the current excellent level is likely, taking into account increases in underwriting risk over the medium term from new lines of business. Saturn writes large gross lines relative to the size of its capital base; however, reinsurance with its sister company, Jupiter Insurance Limited, protects its balance sheet against large losses.
Saturn benefits from low investment risk with approximately half of its portfolio invested in cash and cash equivalents. The remainder is composed of callable loans with a BP affiliate, with excellent liquidity terms.
Saturn’s underwriting performance remained strong in 2016, demonstrated by a combined ratio of 40% (five-year average: 32%). Technical performance has benefited from benign claims experience.
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.
This press release relates to Credit Ratings 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. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.
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