Rating agency Standard & Poor’s (S&P) has revised its long-term counter credit and insurer financial strength ratings on Bermuda-based captive insurer Stellar Insurance.
The captive, which is a core subsidiary of the wholly government-owned Saudi Arabian Oil, had its ratings downgraded to A+ from AA-. The outlook remains negative.
The downgrade on Stellar mirrors a similar rating action taken on Saudi Arabia, with the change in the sovereign ratings mainly reflecting the sharp drop in the Brent oil price, which has widened the government's fiscal deficit.
“The negative outlook on Stellar reflects that on Saudi Arabia. Any change to the sovereign rating or outlook will lead to a similar action on the insurer,” said the rating agency.
Established in 2001, Stellar only writes business for its own book or up to the proportion of its parent's participation in joint ventures, with no pure third-party business in the portfolio.