Rating agency AM Best has affirmed the financial strength rating of Bison Insurance Company, a captive of electric power company Duke Energy.
AM Best affirmed Bison’s financial strength rating of A (Excellent) and the issuer credit rating of ‘a’, with a stable outlook for both ratings.
According to the rating agency, this reflects Bison’s historically excellent capitalisation, consistent operating profitability driven by favourable underwriting results, conservative reserve levels and effective enterprise risk management controls.
“Partially offsetting these positive rating factors are Bison’s volatile underwriting results, due to its low-frequency, high-severity risk profile, coupled with its high net retained limits relative to its available capital,” said the rating agency.
“Additionally, the continually changing risk profile of Bison’s primary insureds directly affects its risk profile. This is mitigated by the company’s conservative reserving philosophy and the ongoing demonstrated support from its parent, Duke Energy.”