AM Best has assigned a financial strength rating of A- (Excellent) and an issuer credit rating of “a-” to US-based pure captive insurance firm ICM Assurance (ICMA). The outlook assigned to both ratings is stable.
The ratings reflect ICMA’s strong risk-adjusted capitalisation; favourable performance record; sound risk management capabilities, with a focus on sustaining solid capitalisation and underwriting performance; and conservative balance sheet strategies. The ratings also consider ICMA’s important role as a single-parent captive and the implied support provided by its parent, CNOOC, whose management incorporates ICMA as a core element of CNOOC’s overall risk management safety and risk mitigation programmes.
Partially offsetting these positive rating factors are ICMA’s high gross loss potential due to the nature of the insurance provided, which is subject to high severity and significant dependence on reinsurance. This is partially tempered by the extensive loss control and group-wide safety programs provided by its ultimate parent, which helps to mitigate losses arising from its parent’s ordinary course of business.
Extensive reinsurance protection placed with a panel of financially strong reinsurers also limits the company’s net exposure to shock loss events. Also noteworthy, is the significant percentage of assets loaned to its parent. However, these investments are very liquid and repayable on demand; hence, there is limited counterparty risk due to the affiliation of the two companies.
ICMA provides coverage for property damage, operators extra expense, pollution liability, business interruption and onshore and offshore liability, as well as property under construction, to CNOOC and affiliates and subsidiaries related to risks in which CNOOC has ownership interests.
AM Best, ICM Assurance, CNOOC, North America