AM Best has affirmed the financial strength rating of A (Excellent) and the long-term issuer credit rating of “a+” (Excellent) of Vermont-based Sooner Insurance Company (Sooner).
The outlook of these credit ratings is stable.
The ratings reflect Sooner’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 (ERM).
According to the ratings company, Sooner’s balance sheet strength is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), generally favourable loss reserve development and low underwriting leverage.
AM Best says Sooner’s most significant asset is a loan back to its ultimate parent, ConocoPhillips. The loan provides Sooner’s capital and is considered to have low risk due to the parent/subsidiary affiliation, as well as the parent’s strong balance sheet and history of positive earnings.
Sooner has a long track record of strong operating performance, driven by solid underwriting profits, finds AM Best. The company’s loss experience has been largely favourable for more than a decade, due in large part to ConocoPhillips’s strong risk management programmes.
As a core component in ConocoPhillips’ ERM programme, the captive arrangement afforded the corporation flexibility to manage the largest loss efficiently and productively in its history from a claim late in 2021, AM Best adds.
The company’s business profile assessment reflects its position as the captive insurer for its ultimate parent. Sooner’s underwriting risks mainly provide property damage and excess liability coverage to ConocoPhillips and its global subsidiaries and joint ventures.
Sooner’s ERM has a culture of risk awareness and a framework to identify and manage various types of risks continually, including periodic reviews of its potential loss exposures through a specialist within industrial risks, a process AM Best views as very appropriate for the company’s risk profile.
The ratings also reflect the implicit support of ConocoPhillips and the critical role the captive plays in its ERM programme.
