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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - NOVEMBER 12, 2007 12:00 AM (EST)
A.M. Best Co. has affirmed the financial strength rating (FSR) of A+ (Superior) and assigned issuer credit ratings (ICR) of "aa" to the Ancon Insurance and Petroleum Casualty Group. These ratings apply to Ancon Insurance Company, Inc. (Ancon) (Vermont) and its reinsured affiliate, Petroleum Casualty Company (PCC) (Texas). The outlook for all ratings is stable.
The ratings reflect the group's superior capitalization, consistently strong operating results and sound risk management strategies. The ratings also consider the extensive experience and commitment of its parent, Exxon Mobil Corporation (ExxonMobil) [NYSE:XOM], whose management incorporates the group as a core element in the overall risk management program of the company.
Ancon is one of the largest captives in the United States and benefits from its history of more than 60 years in operation as a captive insurer. These positive rating factors are partially offset by the group's high net per occurrence loss potential stemming from large loss events. However, this is somewhat mitigated by the group's excellent loss history, favorable geographic spread of risk and ExxonMobil's history of supporting the group's strong surplus position. A.M. Best believes the group is very well positioned to maintain a superior level of capitalization and operating performance due to its demonstrated management expertise and conservative underwriting criteria.
Ancon and PCC accept insurance risks only from ExxonMobil and its worldwide affiliates, providing specialized direct and assumed property/casualty, workers' compensation and marine coverages. Although the group provides coverages for very large risks, they are underwritten with tight guidelines and significant loss control measures by the insured affiliates, as evidenced by an average combined ratio of 34% over the last five years. The group has been very profitable, and its balance sheet strength has been bolstered through substantial retained earnings. A significant percentage of assets are loaned to a subsidiary of ExxonMobil; however, these investments are very liquid and are guaranteed by the parent.
For current Best's Ratings and independent data on the captive and alternative insurance market, please visit Best's Captive Center.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.