A.M. Best has affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit rating of “a-” of ICM Assurance (ICMA).
The ratings reflect ICMA’s balance sheet strength, which A.M. Best categorises as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
ICMA is a single-parent captive insurer, wholly owned by CNOOC International, which is in turn wholly owned by CNOOC, ultimate parent.
The balance sheet strength, according to A.M. Best, is fortified by ICMA’s risk-adjusted capitalisation being at the strongest level, generally favourable trend of earnings, good liquidity and low underwriting leverage.
A.M. Best explained that ICMA’s high gross loss potential due to the nature of the insurance provided for oil and gas exploration, which is subject to high severity losses, is tempered partially by the extensive loss control and group-wide safety programmes provided by its ultimate parent, which help mitigate losses arising from its parent’s ordinary course of business.
The captive’s investments are highly concentrated in a loan to its parent, which A.M. Best said reflects strong mutual reliance and support of the parent and ultimate parent.
In addition, the captive’s loss experience generally has remained favourable, according to the rating company, due in part to the absence of catastrophe events and to its inherent underwriting expertise, which incorporates strong loss control programmes adopted by the parent.
A.M. Best said: “The neutral business profile assessment is driven by ICMA’s fundamental role as a single-parent captive of CNOOC, whose management incorporates ICMA as a core element of the enterprise’s overall risk management safety and risk mitigation programmes. The captive provides liability and property coverages to the parent company and its affiliates globally.”