Moody’s has imbued CNPC Captive Insurance Company with an ‘A1’ insurance financial strength rating.
The outlook on the rating is negative, in line with the negative outlook of the captive’s parent, China National Petroleum Corporation (CNPC).
The CNPC Captive Insurance Company rating reflects the confirmation of the ‘Aa3’ issuer rating of its parent on 30 March 2016.
Moody’s expects CNPC’s credit metric to stay within tolerance levels for its baseline credit assessment of ‘a1’, despite its assumption of weak oil prices.
The new rating takes into consideration the likelihood of high-level support from the Chinese government if required, according to Moody’s.
CNPC Captive Insurance Company is a sole captive insurance subsidiary of CNPC, which insurers only internal group risk, meaning the insurer’s credit profile is highly correlated with the issuer rating of its parent.
In addition, CNPC Captive Insurance's ‘A1’ insurance financial strength rating reflects its solid levels of capital and its very liquid investment portfolio.
CNPC Captive Insurance's rating is also supported by the close alignment of risk management and the expected financial support provided by its parent when needed.
Moody’s believes that the parent will continue providing both operational and financial resources.
According to the rating agency, the outlook would likely return back to stable if the outlook of CNPC goes the same way.
