Fitch has affirmed the insurer and national insurer financial strength ratings of the pure captive of Colombian energy company Ecopetrol.
Bermuda-based Black Gold Re’s ratings were affirmed at “BBB+” and “AAA(col)”. The captive is the sole captive reinsurer of Ecopetrol and only reinsures Grupo Ecopetrol risks.
The main purpose of Black Gold Re is to optimise the cost of risk transfer, provide value-added services, and position itself as the captive of all subsidiaries of Grupo Ecopetrol, according to Fitch.
As of September 2015, the captive had earnings amounting $90.4 million, attributable to the positive internal generation of resources it has had since its inception, which in turn represents savings and benefits produced for Grupo Ecopetrol.
Black Gold Re’s capital has doubled in the last five years ($180 million as of September 2015), mainly due to an internal generation of resources and a conservative policy of maintaining retained earnings.
Fitch expects the captive to strengthen its capital structure in order to provide optimal insurance alternatives in times of stress and tough market conditions.
