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FOR IMMEDIATE RELEASE
HONG KONG - AUGUST 26, 2015 12:56 PM (EDT)
A.M. Best has affirmed the financial strength rating (FSR) of A- (Excellent) and the issuer credit rating (ICR) of "a-" of INPEX Insurance, Ltd. (IIL) (Bermuda). The outlook for both ratings is stable.
The rating reflects IIL's favorable operating results and strong risk-adjusted capitalization. In addition, IIL benefits from implicit and explicit support provided by its parent company, INPEX CORPORATION (INPEX). As a single parent captive domiciled in Bermuda, IIL provides marine and energy coverage to the parent and its affiliated global companies.
IIL reported an improvement in profitability since it reported a loss in 2011, mainly due to the absence of large losses during the subsequent period. Although the majority of IIL's capital is loaned back to INPEX, IIL is considered to have relatively low risk due to this affiliation, and also benefits from the parent's strong balance sheet and earnings profile.
Partially offsetting these positive rating factors are IIL's significant reinsurance credit risk stemming from the large limits offered on its policies and the possible change in the captive's net retentions.
Positive rating actions could occur if IIL continues to produce robust earnings while maintaining its strong level of risk-adjusted capitalization with an increase in absolute capital amount. Negative rating actions could occur if there is a material shift in the risk profile that could potentially undermine the stability and profitability of IIL. In addition, deterioration in the credit profile of INPEX could also impact IIL's ratings.
Ratings are communicated to rated entities prior to publication, and unless stated otherwise, the ratings were not amended subsequent to that communication.
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 visit A.M. Best's Ratings & Criteria Center.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.