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Best’s News & Research Service - May 27, 2016 11:08 AM (EDT)

A.M. Best Affirms Ratings of Saturn Insurance Inc.

  • May 27, 2016 11:08 AM (EDT)
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London //BestWire// - A.M. Best has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of “a-” of Saturn Insurance Inc. (Saturn) (Burlington, VT). Saturn is a captive of BP p.l.c. (BP), an integrated global oil and gas company. The outlook for each rating remains stable.

The ratings reflect Saturn’s strong risk-adjusted capitalisation and good financial performance over the past three years. In addition, the ratings consider Saturn’s affiliation with and importance to its ultimate parent, BP.

A.M. Best expects Saturn’s risk-adjusted capitalisation to remain strong. Saturn’s capital base has grown 37% since its incorporation in 2011. No dividends have been paid out in this period. Internal capital generation is expected to support an increase in underwriting risk over the medium term from new lines of business. Saturn writes large gross line sizes relative to its capital base size, but reinsurance with its sister company, Jupiter Insurance Limited, protects its balance sheet.

Saturn benefits from low investment risk with approximately half of its portfolio invested in cash and cash equivalents. The remainder is composed of callable loans with a BP affiliate, which have excellent liquidity terms.

Saturn’s underwriting performance remained strong in 2015, demonstrated by a combined ratio of 31% (five-year average: 23%). Technical performance benefited from benign claims experience.

A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated 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 rating(s) 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.

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



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