AM Best has affirmed the financial strength rating of ‘A’ (Excellent) and the long-term issuer credit rating of ‘a+’ (Excellent) of Stellar Insurance, a Bermuda-based single-parent captive of the Saudi Arabian Oil Company (SAOC).
The outlook of these ratings is ‘stable’.
The ratings reflect Stellar’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
Stellar’s balance sheet strength is underpinned by its risk-adjusted capitalisation that is expected to remain comfortably at the strongest level supported by the company’s low underwriting leverage, earnings retention and comprehensive reinsurance programme.
AM Best expects the company’s performance in 2024 and prospectively to remain strong, albeit over the longer term subject to potential volatility due to the captive’s exposure to high severity, low frequency losses in its energy programme.
Stellar’s business profile assessment reflects the key role it plays in SAOC’s overall risk management framework by providing tailored risk transfer solutions for SAOC and its affiliates' operations.
Stellar’s portfolio is concentrated by line of business, with the majority of premiums represented by energy onshore and offshore property risks, as well as by geography with approximately 84 per cent of premiums associated with risks located in Saudi Arabia.
