AM Best Affirms Credit Ratings of Spirit Insurance Company and Radius Insurance Company
December 03 2020 - 1:20PM
Business Wire
AM Best has affirmed the Financial Strength Rating of A
(Excellent) and the Long-Term Issuer Credit Ratings of “a” of
Spirit Insurance Company (Spirit) (Colchester, VT) and Radius
Insurance Company (Radius) (Cayman Islands). The outlook of these
Credit Ratings (ratings) is stable.
The ratings reflect Spirit and Radius’ balance sheet strength,
which AM Best categorizes as very strong, as well as their adequate
operating performance, neutral business profile and appropriate
enterprise risk management.
Spirit and Radius are captive insurers for their ultimate
parent, Phillips 66 [NYSE: PSX], whose management incorporates the
captives as core elements in its overall risk management program.
The captives’ loss experience has remained generally favorable due
in part to a lack of material catastrophe losses, as well as the
parent’s strong loss control program. Phillips 66 conducts periodic
reviews of Spirit and Radius’ potential loss exposures through an
industrial risks specialist.
The captives’ underwriting risks largely consist of onshore and
limited offshore property and liability business. Spirit provides
property damage, business interruption, excess liability and
employee medical reimbursement insurance to Phillips 66, its
affiliates and subsidiaries’ domestic U.S. operations only;
however, Spirit generally does not provide coverage for Texas-based
risks. Radius provides similar coverage (property damage, business
interruption, excess liability), as well as cargo insurance to
Phillips 66, its affiliates, and subsidiaries’ non-U.S. risks in
which Phillips 66 has ownership interests.
Spirit and Radius have exposure to high severity, low frequency
losses due to the limits offered on their respective policies and
their significant dependence on reinsurance protection.
Additionally, Spirit provides terrorism coverage to its parent.
While terrorism risk exposure remains relatively high on a gross
basis, concerns are mitigated by reinsurance protection afforded by
the Terrorism Risk Insurance Program Reauthorization Act, which
expires in 2027.
AM 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 AM 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 AM Best’s Recent Rating
Activity web page. For additional information regarding the use and
limitations of Credit Rating opinions, please view Guide to Best’s
Credit Ratings. For information on the proper media use of Best’s
Credit Ratings and AM Best press releases, please view Guide for
Media - Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in New York, London,
Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more
information, visit www.ambest.com.
Copyright © 2020 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Kourtnie Beckwith Financial Analyst +1 908 439
2200, ext. 5124 kourtnie.beckwith@ambest.com
Susan Molineux Director +1 908 439 2200, ext.
5829 susan.molineux@ambest.com
Christopher Sharkey Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Jim Peavy Director, Communications +1 908 439
2200, ext. 5644 james.peavy@ambest.com
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