A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of "a" of Bison Insurance Company. The outlook for both ratings is stable.
The rating actions reflect Bison's historically excellent capitalisation, consistent operating profitability driven by favourable underwriting results, conservative reserve levels and effective enterprise risk management controls.
The ratings also recognise Bison's history of maintaining sufficient capital and financial resources to support its ongoing obligations.
Partially offsetting these positive rating factors are Bison's volatile underwriting results, due to its low frequency, high severity risk profile, coupled with its high net retained limits relative to its available capital.
Additionally, the continually changing risk profile of Bison's primary insureds directly affects its risk profile.
This is mitigated by the company's conservative reserving philosophy and the ongoing demonstrated support from its parent, Duke Energy Corporation.
Bison insures select risks for Duke Energy providing a variety of coverage in property/casualty lines of business.
The risk management team of Duke Energy takes a holistic approach to managing its risks and uses the captive as an integral part in this process. Bison's long-term growth opportunities primarily depend on the business success of Duke Energy.
A.M. Best believes that Bison is well positioned at its current rating level and the ratings are not expected to be upgraded or its outlook revised in the near term.
