A.M. Best Affirms Credit Ratings of ICM Assurance Ltd
December 07 2016 - 4:01PM
Business Wire
A.M. Best has affirmed the Financial Strength Rating of
A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” of
ICM Assurance Ltd (ICMA) (St. Michael, Barbados). The
outlook of these Credit Ratings (ratings) is stable.
The ratings reflect ICMA’s strong risk-adjusted capitalization,
favorable performance record, sound risk management capabilities
with a focus on sustaining solid capitalization and underwriting
performance, and conservative balance sheet strategies. The ratings
also consider ICMA’s important role as a single-parent captive and
the implied support provided by its parent, CNOOC Limited (CNOOC)
[ADR-traded NYSE: CEO], whose management incorporates ICMA as a
core element of CNOOC’s overall risk management safety and risk
mitigation programs.
ICMA is a single-parent or pure captive insurer wholly owned by
CNOOC International Limited, which in turn is wholly owned by
CNOOC.
Partially offsetting these positive rating factors are ICMA’s
high gross loss potential due to the nature of the insurance
provided for oil and gas exploration, which is subject to high
severity and significant dependence on reinsurance. This is
partially tempered by the extensive loss control and group-wide
safety programs provided by its ultimate parent, which helps
mitigate losses arising from its parent’s ordinary course of
business. Extensive reinsurance protection, placed with a panel of
financially strong reinsurers, also limits ICMA’s net exposure to
shock loss events. Also noteworthy is the significant percentage of
assets that ICMA has loaned to its parent. These investments are
very liquid and repayable on demand so there is limited
counterparty risk due to the affiliation of the two companies.
ICMA provides coverage for property damage, operators extra
expense, pollution liability, business interruption and onshore and
offshore liability, as well as property under construction, to
CNOOC and its affiliates and subsidiaries related to risks in which
CNOOC has ownership interests.
ICMA has generally reported consistently strong operating
results. While favorable operating performance has been good in the
most recent five years, underwriting results are volatile and
susceptible to occasional outsized losses. This was evidenced in
the first nine months of 2016 when ICMA recorded an underwriting
loss of approximately USD 42 million, which eroded USD 37 million
or 8% of the company’s capital and surplus. The captives’ loss
experience has remained favorable due in part to no material
catastrophe events, its inherent knowledge of the business it
underwrites and the strong loss control programs adopted at the
parent level. The risk management team conducts periodic reviews of
ICMA’s potential loss exposures through an industrial risks
specialist.
A.M. Best notes that despite its diversified business platform,
sustaining a trend of stable earnings is a challenge for ICMA due
to the nature of the business.
A.M. Best remains the leading rating agency of alternative risk
transfer entities, with more than 200 such vehicles rated in the
United States and 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.
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. and/or its subsidiaries. ALL RIGHTS
RESERVED.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161207006270/en/
A.M. BestAlexander Sarfo, +1 908 439 2200, ext.
5779Senior Financial
Analystalexander.sarfo@ambest.comorGary A. Davis, +1
908 439 2200, ext.
5665Directorgary.davis@ambest.comorChristopher
Sharkey, +1 908 439 2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy,
+1 908 439 2200, ext. 5644Director, Public
Relationsjames.peavy@ambest.com
Cnooc (NYSE:CEO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Cnooc (NYSE:CEO)
Historical Stock Chart
From Apr 2023 to Apr 2024