A.M. Best Affirms Credit Ratings of Sooner Insurance Company
September 21 2016 - 3:05PM
Business Wire
A.M. Best has affirmed the Financial Strength Rating of A
(Excellent) and the Long-Term Issuer Credit Rating of “a” of
Sooner Insurance Company (Sooner) (Burlington, VT). The
outlook of these Credit Ratings (ratings) remains stable.
The rating affirmations reflect Sooner’s excellent risk-adjusted
capitalization, history of consistent strong operating
profitability driven by favorable underwriting results,
conservative reserve levels and the position it holds as the
captive insurer for its ultimate parent, ConocoPhillips
[NYSE: COP]. The ratings also consider the level of commitment on
the part of ConocoPhillips, whose management incorporates Sooner as
a core element in its overall risk management program.
Partially offsetting these positive rating factors are Sooner’s
significant reinsurance credit risk stemming from the large limits
offered on its policies and the possible change in the captive’s
net retentions that could happen year over year, as well as the
limited diversification of business written, which is expected with
a single-parent captive.
Sooner provides property damage, business interruption and
general liability insurance to ConocoPhillips and its subsidiaries
worldwide.
Sooner has a history of generally positive underwriting results
and strong operating return measures. Over a 10-year period, the
company’s loss experience has remained favorable due, in part, to
ConocoPhillips’ strong risk management programs.
ConocoPhillips’ corporate insurance and health, safety and
environmental groups conduct periodic reviews of their potential
loss exposures through a specialist in industrial risks. Sooner may
have high net retentions based upon the capacity of the overall
insurance market from year to year. Nonetheless, Sooner has the
capital to retain these risks, if net retentions were to increase.
Although the majority of Sooner’s capital is loaned to
ConocoPhillips, it is considered to have relatively low risk due to
this affiliation, as well as the parent’s strong balance sheet and
history of positive earnings.
Positive rating actions are unlikely at present. Downward rating
pressure could be the result of material losses outside of
management’s expectations, a significant and sustained decline in
Sooner’s risk-adjusted capitalization, operating performance
results that do not meet A.M. Best’s expectations, or a material
shift in its risk profile that could potentially undermine the
stability of its ratings. In addition, deterioration in
ConocoPhillips’ credit profile could impact Sooner’s ratings.
A.M. Best remains the leading rating agency of alternative risk
transfer entities, with more than 200 such vehicles rated in the
United States and throughout the world. For current Best’s Credit
Ratings and independent data on the captive and alternative risk
transfer insurance market, please visit www.ambest.com/captive.
This press release relates to Credit Ratings that have been
published on A.M. Best’s website. For all rating information
relating to the release and pertinent disclosures, including
details of the office responsible for issuing each of the
individual ratings referenced in this release, please see A.M.
Best’s Recent Rating Activity web page. For
additional information regarding the use and limitations of Credit
Rating opinions, please view Understanding Best’s Credit
Ratings.
A.M. Best is the world’s oldest and most authoritative
insurance rating and information source. For more information,
visit www.ambest.com.
Copyright © 2016 by A.M. Best Rating
Services, Inc. and/or its subsidiaries. ALL RIGHTS
RESERVED.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160921006451/en/
A.M. BestAlexander Sarfo, +1 908-439-2200, ext.
5779Senior Financial
Analystalexander.sarfo@ambest.comorGary A. Davis, +1
908-439-2200, ext. 5665Assistant Vice
Presidentgary.davis@ambest.comorChristopher Sharkey, +1
908-439-2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy, +1
908-439-2200, ext. 5644Assistant Vice President, Public
Relationsjames.peavy@ambest.com
ConocoPhillips (NYSE:COP)
Historical Stock Chart
From Aug 2024 to Sep 2024
ConocoPhillips (NYSE:COP)
Historical Stock Chart
From Sep 2023 to Sep 2024