AM Best affirms ratings of Schlumberger captives
AM Best has affirmed the financial strength rating of A and the long-term issuer credit ratings of “a+” of Castle Harbour Insurance and Harrington Sound Insurance.
These companies are captive insurance companies for Schlumberger (SLB). The outlook of these ratings is stable. Both captives are domiciled in Bermuda.
AM Best said that the ratings of Castle Harbour and Harrington reflect their balance sheet strength, which it assesses as strongest, as well as their strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).
Castle Harbour and Harrington are single-parent captives of their ultimate parent, SLB, a global technology company focused on energy innovation. Castle Harbour and Harrington maintain the strongest level of risk-adjusted capitalization, as measured by Best’s capital adequacy ratio, in addition to displaying excellent liquidity measures. The operating performance assessments of strong reflect the companies’ favourable underwriting results driven by excellent loss history and benefiting from inherently low expense structures as single-parent captives. The ratings also take into consideration the captives’ strategic importance in providing tailored insurance coverages for the parent and its subsidiaries.
While each captive carries relatively large limits within its respective designated coverages for the parent in the general liability and property lines of business, each writes a broad scope of business and has considerable geographic diversification. Each captive also maintains significant retentions within the offered limits, but they are readily manageable within their respective capital bases and organic surplus growth, offset by periodic sizeable dividends.
As captive insurers of SLB, the companies are an integral part of the parent’s ERM framework, which includes defined risk controls and optimization of the captives’ capital. Further, AM Best recognizes the financial flexibility afforded by their parent company, and their strategic importance across SLB.