Rating agency AM Best has affirmed the ratings of Japanese oil corporation Inpex’s Bermuda-based captive.
AM Best affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of ‘a-‘ of Inpex Insurance.
The captive provides marine and energy coverage to the parent and its affiliated global companies.
According to the rating agency, the rating recollects Inpex Insurance’s favourable operating results and strong risk-adjusted capitalisation.
“In addition, Inpex Insurance benefits from implicit and explicit support provided by its parent company, Inpex Corporation,” said AM Best.
“Inpex Insurance reported an improvement in profitability since it reported a loss in 2011, mainly due to the absence of large losses during the subsequent period. Although the majority of Inpex Insurance’s capital is loaned back to Inpex, Inpex Insurance is considered to have relatively low risk due to this affiliation, and also benefits from the parent’s strong balance sheet and earnings profile.”
However, the captive’s significant reinsurance credit risk stemming from the large limits offered on its policies partially offsets the positive factors, together with the possible change in the captive’s net retentions.
AM Best, Inpex, Inpex Insurance, Asia-Pacific, Bermuda