A.M. Best has affirmed the financial strength ratings of “A (Excellent)” and long-term issuer credit ratings of “a” for Spirit Insurance Company and Radius Insurance Company, captives of Phillips 66.
The Spirit Insurance Company is located in Burlington, Vermont and Radius Insurance Company is based in the Cayman Islands.
The rating affirmations reflect the captives “excellent” risk-adjusted capitalisation, risk management practices and “profitable” business written from a predecessor captive.
In addition, A.M. Best recognised the level of commitment on the part of Phillips 66, whose management incorporates Spirit and Radius as “core elements” in its overall risk management programme.
According to the ratings agency, the captive’s loss experience has remained “favourable”, partly due to no material catastrophe events and the “strong” loss control programmes at the parent.
Spirit provides terrorism coverage to its parent and, while terrorism risk exposure remains relatively high on a gross basis, A.M. Best suggested that concerns are mitigated by reinsurance protection afforded by the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA).
However, due to the “temporary nature” of TRIPRA, A.M. Best said it will continue to monitor the company’s gross terrorism risk exposure over time as it relates to the company’s risk management practices and overall capacity.
