10 August 2017
HONG KONG – A.M. Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of INPEX Insurance, Ltd. (IIL) (Bermuda).
IIL is a single-parent captive of INPEX CORPORATION (INPEX), Japan’s largest oil and gas exploration and production company.
“The outlook of these Credit Ratings (ratings) is stable. The ratings reflect IIL’s strong risk-adjusted capitalization and favorable operating performance.
“The ratings also consider IIL’s affiliation with and importance to its ultimate parent, INPEX.
“Partially offsetting these ratings is IIL’s concentrated investment portfolio, which consists predominantly of loan-back to its parent, whose credit profile has weakened over the past few years, due mainly to the downturn in the oil and gas markets,” said the A.M. spokesperson.
The spokesperson told further that IIL was exposed potentially to high credit risk, as it wrote sizeable gross risks relative to its capital.
“Positive rating actions could occur if IIL continues to maintain its strong level of risk-adjusted capitalization along with an improved credit profile of its parent.
“Negative rating actions could occur if there is a substantial increase in losses caused by a material shift in risk appetite or significant erosion of capital.
“In addition, significant deterioration in INPEX’s credit profile could put downward pressure on IIL’s ratings,” said the spokesperson.
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.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.