A.M. Best Affirms Credit Ratings of Spirit Insurance Company and Radius Insurance Company
September 21 2017 - 01:20PM
Business Wire
A.M. Best has affirmed the Financial Strength Rating of A
(Excellent) and the Long-Term Issuer Credit Ratings of “a” of
Spirit Insurance Company (Spirit) (Burlington, VT) and
Radius Insurance Company (Radius) (Cayman Islands). The
outlook of these Credit Ratings (ratings) is stable.
The rating affirmations reflect Spirit’s and Radius’ excellent
risk-adjusted capitalization, sound risk management practices and
history of profitable business written from a predecessor captive,
as well as the position they hold as the captive insurers for their
ultimate parent, Phillips 66 [NYSE: PSX]. The ratings also
consider the level of commitment on the part of Phillips 66, whose
management incorporates Spirit and Radius as core elements in its
overall risk management program.
Partially offsetting these positive rating factors are Spirit’s
and Radius’ exposure to large losses due to the limits offered on
their respective policies and their significant dependence on
reinsurance protection. In addition, Spirit’s terrorism risk
exposure remains relatively high on a gross basis.
Spirit provides property damage, business interruption and
excess liability insurance to Phillips 66, and affiliates and
subsidiaries related to domestic U.S. operations only; however,
Spirit does not provide coverage for Texas-headquartered risk.
Radius provides similar coverage (property damage, business
interruption, excess liability), as well as cargo insurance to
Phillips 66 and affiliates, and subsidiaries related to non-U.S.
risks in which Phillips 66 has ownership interests.
Business is written separately by Spirit and Radius, and each
company has a history of strong underwriting results and operating
returns. The captives’ loss experience has remained favorable due
in part to no material catastrophe events and the strong loss
control programs at the parent. Phillips 66 conducts periodic
reviews of Spirit’s and Radius’ potential loss exposures through an
industrial risks specialist. Although the majority of Spirit’s
capital is loaned to its parent, there is limited counterparty risk
due to the affiliation of the two companies and the alignment of
interests. Additionally, Spirit provides terrorism coverage to its
parent. While terrorism risk exposure remains relatively high on a
gross basis, concerns are mitigated by reinsurance protection
afforded by the Terrorism Risk Insurance Program Reauthorization
Act (TRIPRA). However, due to the temporary nature of TRIPRA, A.M.
Best will continue to monitor the company’s gross terrorism risk
exposure over time as it relates to the company’s risk management
practices and overall capacity. It’s worth noting that the
potential for future earnings volatility related to recent weather
events such as Hurricane Harvey, and capital position has already
been considered in A.M. Best’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. For information on the proper media use of Best’s
Credit Ratings and A.M. Best press releases, please view
Guide for Media - Proper Use of Best’s Credit Ratings and A.M.
Best Rating Action Press Releases.
A.M. Best is the world’s oldest and most authoritative
insurance rating and information source. For more information,
visit www.ambest.com.
Copyright © 2017 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/20170921005982/en/
A.M. BestAlexander Sarfo, +1 908-439-2200, ext.
5779Senior Financial
Analystalexander.sarfo@ambest.comorGary A. Davis, +1
908-439-2200, ext.
5665Directorgary.davis@ambest.comorChristopher
Sharkey, +1 908-439-2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy, +1
908-439-2200, ext. 5644Director, Public
Relationsjames.peavy@ambest.com
Phillips 66 (NYSE:PSX)
Historical Stock Chart
From Feb 2024 to Mar 2024
Phillips 66 (NYSE:PSX)
Historical Stock Chart
From Mar 2023 to Mar 2024