AM Best withdraws ratings of Chevron captive

Rating agency AM Best has withdrawn its ratings of Iron Horse Insurance Company, a Chevron captive.

The rating agency affirmed the company’s financial strength rating of A (Excellent) and its issuer credit rating as ‘a+’.

The ratings reflect Iron Horse’s adequate risk-adjusted capitalisation, explicit parental support, experienced management team and the role it plays as a direct captive subsidiary of Chevron Corporation, said AM Best.

This is partially offset by the captive’s high net loss , with the coverages provided tending to result in claims that are characterised as low frequency but high severity.

“This is somewhat mitigated by the captive’s ability to secure capital from Chevron in the event of a covered shock loss,” added the rating agency.