A.M. Best has affirmed the financial strength rating of “A” (Excellent) and the long-term issuer credit rating of “a” (Excellent) of Stellar Insurance (Bermuda), a single-parent captive of Saudi Arabian Oil Company (SAOC). The outlook of these credit ratings is stable. The rating agency says these ratings reflect Stellar’s balance sheet strength, which is determined to be very strong according to Best’s Capital Adequacy Ratio. A.M. Best says it expects Stellar’s risk-adjusted capitalisation to remain at the strongest level owing to the captive’s low underwriting leverage, full earnings retention and comprehensive reinsurance programme. However, A.M. Best notes that Stellar’s balance sheet strength is offset by the company’s reliance on reinsurance to provide high limit energy cover. The ratings were also determined by the captive’s strong operating performance, neutral business profile and appropriate enterprise risk management. Stellar’s business profile indicates the role it plays in SAOC’s overall risk management framework as a single-parent captive providing transfer solutions for the risks of SAOC and its affiliates.
