AM Best assigns ratings to Rodeo
AM Best has assigned a financial strength rating of A (Excellent) and a long-term issuer credit rating of “a+” to Houston-based Rodeo Insurance Company. The outlook assigned to these ratings is stable.
According to the rating agency the ratings reflect Rodeo’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).
Rodeo’s balance sheet strength is supported by the strongest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, appropriate investment mix and robust loss reserves. The balance sheet is protected further by Sooner Insurance Company’s 100% reinsurance of Rodeo’s risk.
Rodeo’s strong operating performance assessment is based on its consistent operating profitability and return metrics. The company’s minimal loss experience reflects its pass-through function to its reinsuring parent, Sooner, for claims on exposures filed by its policyholder and ultimate parent, ConocoPhillips.
Rodeo’s limited business profile assessment reflects its relatively narrow geographic concentration. Rodeo is a Texas-domiciled single-parent captive, wholly owned subsidiary of Sooner, which is an indirect, wholly owned subsidiary of ConocoPhillips. Rodeo mainly provides property damage and excess liability coverage to ConocoPhillips for its risks only in Texas.
According to AM Best: “Rodeo’s ERM demonstrates a culture of risk awareness and a framework to identify and manage its risks continually, including periodic reviews of its potential loss exposures through a specialist within industrial risks, a process AM Best views as very appropriate for the company’s risk profile. The ratings also benefit from the implicit and explicit support of its parent, Sooner, and ultimate parent, ConocoPhillips, and the strategic role the captive plays in its ERM program.”
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