A.M. Best has affirmed the financial strength rating of ‘A-’ (Excellent) and the long-term issuer credit rating of ‘a-’ (Excellent) for Jamestown Insurance Company, a single-parent captive of Hess Oil and Gas Holdings. As a captive insurance company, Jamestown provides reinsurance coverage on certain property, as well as controlling the well, redrill, pollution and liability risks of its parent corporation. The company provides underwriting flexibility to Hess through stable pricing and access to the reinsurance market. The outlook of the credit ratings is stable, reflecting Jamestown’s “very strong” balance sheet strength and risk-adjusted capitalisation as measured by Best’s Capital Adequacy Ratio. The rating agency notes that Jamestown’s balance sheet is also helped by the captive’s strong record of retained earnings and effective implementation of third-party reinsurance to transfer risk. However, A.M. Best adds that this is partially offset by Jamestown’s high degree of exposure to credit risk through its extensive reinsurance programme. In addition, the ratings are based on the captive’s adequate operating performance, limited business profile and appropriate enterprise risk management, as well as “explicit support” from parent company Hess Oil and Gas Holdings.
