A.M. Best Affirms Credit Ratings of INPEX Insurance, Ltd.
HONG KONG--(BUSINESS WIRE)--Aug 31, 2018--A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of INPEX Insurance, Ltd. (IIL) (Bermuda). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect IIL’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
IIL’s very strong balance sheet assessment mainly reflects its low underwriting leverage and conservative investment portfolio. Given the volume of risks that the company currently writes and retains, the capital required to support its current book of business is relatively modest.
IIL’s underwriting results over the most-recent five-year period have been consistently positive, contributing to an average combined ratio of under 40%. Despite very strong underwriting margins, loss and combined ratios have been volatile, owing primarily to a relatively small in-force portfolio. A.M. Best expects IIL’s operating performance to remain profitable, although the company’s underwriting results also likely will remain volatile until the company can achieve much greater scale.
IIL is a single-parent captive of INPEX CORPORATION (INPEX), which is the largest oil and gas exploration and production company in Japan. In its role as a single-parent captive, it provides coverage that mainly consists of property damage, third-party liability and operator’s extra expenses for its parent, its affiliates and joint-venture companies. The types of business written expose the company’s performance to high-severity, low-frequency losses. Nevertheless, IIL has managed this risk through prudent underwriting and a robust reinsurance program with conservative retention levels and limits.
The stable outlook reflects A.M. Best’s expectation that IIL will continue to deliver consistently positive operating results, supported by a return to growth with strong underwriting margins and stable investment yields.
Positive rating actions could occur if IIL continues to maintain its very strong balance sheet strength, along with more stable underwriting and operating results. Negative rating actions could occur if there is a substantial increase in losses caused by a material shift in risk appetite or significant erosion of capital. In addition, significant deterioration in INPEX’s credit profile could put 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 .
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 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 web page. For additional information regarding the use and limitations of Credit Rating opinions, please view . For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view .
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CONTACT: A.M. Best
Jason Shum, +852-2827-3424
Associate Director, Analytics
Christie Lee, +852-2827-3413
Christopher Sharkey, +1-908-439-2200, ext. 5159
Manager, Public Relations
Jim Peavy, +1-908-439-2200, ext. 5644
Director, Public Relations
KEYWORD: BERMUDA EUROPE ASIA PACIFIC CARIBBEAN HONG KONG
INDUSTRY KEYWORD: PROFESSIONAL SERVICES INSURANCE
SOURCE: A.M. Best
Copyright Business Wire 2018.
PUB: 08/31/2018 10:10 AM/DISC: 08/31/2018 10:10 AM