AM Best Affirms Credit Ratings of Sooner Insurance Company
January 12 2021 - 10:42AM
Business Wire
AM Best has affirmed the Financial Strength Rating of A
(Excellent) and the Long-Term Issuer Credit Rating of “a+” of
Sooner Insurance Company (Sooner) (Colchester, VT). The outlook of
these Credit Ratings (ratings) is stable.
The ratings reflect Sooner’s balance sheet strength, which AM
Best categorizes as very strong, as well as its strong operating
performance, neutral business profile and appropriate enterprise
risk management (ERM).
The balance sheet strength is underpinned by risk-adjusted
capitalization at the strongest level, as measured by Best’s
Capital Adequacy Ratio (BCAR), generally favorable loss reserve
development and low underwriting leverage. Although Sooner has a
significant loan to its ultimate parent, ConocoPhillips [NYSE:
COP], it is considered to have relatively low risk due to this
affiliation, as well as the parent’s strong balance sheet and
history of positive earnings.
Sooner’s operating performance has been consistently strong over
the past 10 years, driven by solid underwriting profits, with most
return metrics outperforming the industry composite and modest
investment returns. The company’s loss experience has remained
favorable for over a decade. This is due in part to strong risk
management programs at ConocoPhillips, whose management views
Sooner as a core element in its overall corporate risk management
program.
The company’s business profile assessment reflects its position
as the captive insurer for its ultimate parent. Sooner’s
underwriting risks consist largely of providing property damage and
excess liability coverage to ConocoPhillips and its subsidiaries,
including joint ventures, worldwide.
With regard to its ERM, ConocoPhillips’ corporate insurance and
health, safety and environmental groups have a culture of risk
awareness and a framework to identify and manage various types of
risks, such as periodic reviews of their potential loss exposures
through a specialist in industrial risks, a process AM Best views
as appropriate for its risk profile. The ratings also reflect the
implicit support of ConocoPhillips and the critical role the
captive plays in its ERM program.
AM 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 AM 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 AM Best’s Recent Rating
Activity web page. For additional information regarding the use and
limitations of Credit Rating opinions, please view Guide to Best’s
Credit Ratings. For information on the proper media use of Best’s
Credit Ratings and AM Best press releases, please view Guide for
Media - Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in New York, London,
Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more
information, visit www.ambest.com.
Copyright © 2021 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Kourtnie Beckwith Financial Analyst +1 908 439
2200, ext. 5124 kourtnie.beckwith@ambest.com
Susan Molineux Director +1 908 439 2200, ext.
5829 susan.molineux@ambest.com
Christopher Sharkey Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Jim Peavy Director, Communications +1 908 439
2200, ext. 5644 james.peavy@ambest.com
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