31 May 2013Actuarial & underwriting

Two Chevron captives receive rating affirmations

Chevron’s two captives Heddington, based in Bermuda and Iron Horse Insurance Company, based in Vermont, have received rating affirmations from AM Best as they continue to prove their value to the energy giant.

Both Heddington and Iron Horse have had their A (Excellent) financial strength ratings and issuer credit ratings of “a+” affirmed by AM Best.

AM Best said that in both instances the captives benefitted from the diversity of Chevron’s global operations. It did however express concerns about the prospects of low frequency, high severity losses associated with Chevron’s international operations.

The rating agency said that Heddington’s strong investment income and enterprise risk management as well as positive loss history have helped to offset concerns around potential losses. For Iron Horse, AM Best said that the support of Chevron’s experienced risk management team and direct parental support had helped in the rating affirmation.

Commenting on the employment of Heddington and Iron Horse AM Best said: “In its role as a captive insurer, Heddington, along with Iron Horse Insurance Company currently provides broad and competitive global insurance products for Chevron and its subsidiaries.”

“The insurance needs of Chevron are supplied through these captive operations (where appropriate) and the commercial market. Heddington and the other Chevron captives provide comprehensive coverage above Chevron’s internal retentions, while Heddington and Iron Horse’s reinsurance is placed through a corporate wide plan with the world’s leading providers of capacity, resulting in a diversified and balanced distribution of reinsurers.”