AM Best affirms the financial strength rating of ‘A-’ (Excellent) and the long-term issuer credit rating of ‘a-’ (Excellent) of OneNexus Oklahoma Captive Corp. The outlook of the ratings is ‘stable’. The ratings reflect the captive’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM). OneNexus is a protected cell captive insurer domiciled in Oklahoma and incorporated in 2021. It begins providing contractual liability insurance policies for its direct parent, OneNexus LLC, in 2023. The parent enters into agreements with energy companies to cover costs associated with decommissioning oil and gas wells, with the captive guaranteeing a defined benefit amount to the owner or operator of the wells at the point a well is chosen or required to be decommissioned. The very strong balance sheet strength assessment is supported by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), and reflects permanent regulatory capital in the form of a letter of credit pledged by a highly rated reinsurance company. The assessment also reflects low asset risk from an investment portfolio composed of fixed income securities, short-term investments, cash and cash equivalents. Management actively monitors reserves through the company’s risk modelling system. AM Best assesses operating performance as adequate. OneNexus has limited historical operating results as a start-up, though early results are considered adequate, with positive earnings posted in 2024 and 2025. Underwriting earnings are projected to grow as the captive ramps up operations. The business profile assessment of limited reflects high product concentration in a niche business. Partially mitigating that concentration is the quality of specialised data and analytics within OneNexus. Growth depends largely on regulatory requirements for financial assurance by oil and gas operators, and on market acceptance. The ERM framework is assessed as appropriate, with internal and external risks subject to regular monitoring. The stable outlooks reflect AM Best’s expectation that OneNexus will execute its business plan while maintaining an overall balance sheet assessment in the very strong range, supported by risk-adjusted capitalisation at the strongest level as measured by BCAR.
