AM Best affirms the Financial Strength Rating (FSR) of 'A' (Excellent) and the Long-Term Issuer Credit Ratings (LT-ICR) of 'a' (Excellent) for Spirit Insurance Company and Radius Insurance Company. The outlook for both Credit Ratings is 'stable'. Spirit is domiciled in Colchester, Vermont, and Radius is domiciled in the Cayman Islands. The ratings reflect Spirit and Radius’ balance sheet strength, which AM Best assesses as very strong, as well as each company’s adequate operating performance, neutral business profile, and appropriate enterprise risk management (ERM). The two captives are core elements in the overall risk management programme of their ultimate parent, Phillips 66, and benefit from financial flexibility and support. The captives’ loss experience remains generally favourable due to the parent’s strong loss-control programme. The captives underwrite risks consisting largely of onshore and limited offshore property and liability businesses. Spirit provides property damage, business interruption, excess liability, and employee medical reimbursement insurance for Phillips 66’s domestic U.S. operations, generally excluding Texas-based risks. Radius covers similar risks for Phillips 66’s non-U.S. exposures. The captives have exposure to low frequency, high severity loss claims due to the sizable limits offered on their policies, which introduces potential significant dependence on reinsurance protection. Spirit also provides terrorism coverage to its parent, which is heavily mitigated by reinsurance protection under the federal Terrorism Risk Insurance Programme Reauthorization Act, which currently expires in 2027.
