Saturn Insurance, one of BP’s captive insurance companies, has had its ‘A-’ financial strength rating and long-term issuer credit rating of “a-” affirmed by A.M. Best.
A.M. Best classified Saturn’s balance sheet strength as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.
Saturn’s balance sheet strength is supported by its risk-adjusted capitalisation categorised as strongest, as measured by Best’s Capital Adequacy Ratio.
Saturn recorded firm operating results in the 2014–2018 period, as shown by a five-year average equity of 7.1 percent, which was achieved despite a large workers’ compensation claim that negatively impacted its performance in 2017.
The claim also shows the exposure of the captive’s performance to volatility, which is an offsetting rating factor.
Saturn’s track record of strong performance and full retention of earnings have supported growth in capital and surplus of 51 percent since the company’s incorporation in 2011.
Saturn’s business profile is assessed as limited, reflecting its small and strong portfolio of high-risk business arising from the BP group in the US.
The soft rate environment over the past four years has led to a decline in the captive’s gross written premiums, by approximately 60 percent since 2014.
A.M. Best also affirmed the ratings of another BP captive, Jupiter Insurance.
