AM Best


A.M. Best Affirms Ratings of Bison Insurance Company Limited


CONTACTS:


Alexander Sarfo
Senior Financial Analyst
(908) 439-2200, ext. 5779
alexander.sarfo@ambest.com

Steven M. Chirico, CPA
Assistant Vice President
(908) 439-2200, ext. 5087
steven.chirico@ambest.com


Christopher Sharkey
Manager, Public Relations
(908) 439-2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - AUGUST 26, 2014 03:49 PM (EDT)
A.M. Best has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of "a" of Bison Insurance Company Limited (Bison) (Charleston, SC). The outlook for both ratings is stable.

The rating actions reflect Bison's historically excellent capitalization, consistent operating profitability driven by favorable underwriting results, conservative reserve levels and effective enterprise risk management controls. The ratings also recognize Bison's history of maintaining sufficient capital and financial resources to support its ongoing obligations.

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. 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 Corporation (Duke Energy) [NYSE: DUK].

Bison insures select risks for Duke Energy providing a variety of coverage in property/casualty lines of business. The risk management team of Duke Energy takes a holistic approach to managing its risks and utilizes the captive as an integral part in this process. Bison's long-term growth opportunities primarily depend on the business success of Duke Energy.

A.M. Best believes that Bison is well positioned at its current rating level, and the ratings are not expected to be upgraded or its outlook revised in the near term. Nonetheless, key rating factors that could lead to negative rating actions include a significant and sustained decline in Bison's risk-adjusted capitalization, net 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 the credit profile of Duke Energy could impact Bison'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.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.


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AMB# Company Name
084109 Bison Insurance Company Limited
030576 Duke Energy Corp