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FOR IMMEDIATE RELEASE
OLDWICK - DECEMBER 06, 2016 02:38 PM (EST)
A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of Castle Harbour Insurance Limited, Harrington Sound Insurance Limited and Colliers Bay Insurance Limited (Cayman Islands) (together known as the captives). The outlook of these Credit Ratings (ratings) is stable. All companies are domiciled in Bermuda, unless otherwise specified.
The ratings and outlook reflect the captives’ excellent capitalization and conservative operating strategy. The ratings also consider the captives’ critical role and favorable profile as part of the parent company, Schlumberger Limited, as well as their excellent operating performance during the past five years, providing tailored insurance coverage to subsidiaries of the parent for certain property/casualty risks.
Partially offsetting these positive rating factors are the captives’ relatively large limits in its general liability and property lines of business. Nevertheless, A.M. Best recognizes the substantial financial resources of the captives and its parent.
A.M. Best views the captives’ management and corporate strategy as a strengthening factor in its ratings, given the group’s conservative underwriting, operational goals and transparency. A.M. Best views the captives’ enterprise risk management practices as strong given the impact on its conservative risk culture, defined risk controls and the optimization of its capital and surplus. Other factors considered in A.M. Best’s ratings process include, but are not limited to, the diversification in line of business and geography, as well as the support and commitment of the parent and the group’s mission.
A.M. Best expects the captives’ future operating performance to be stable but strong, and the stable earnings profile should further support the companies to control growth and business writings, which are consistent with the captives’ capital and surplus position.
The outlook of the captives could be raised if operating performance improves and risk-adjusted capital remains supportive of the ratings. Negative rating pressure could occur if underwriting performance declines and demonstrates volatility that negatively impacts earnings and capitalization over time. Negative rating pressure could also result if there is a material shift in risk profile that could potentially undermine the stability and profitability of the company. Financial issues resulting in ratings pressure and affecting the credit profile of the parent could impact the company’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.