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FOR IMMEDIATE RELEASE
OLDWICK, N.J. - JUNE 04, 2008 12:00 AM (EDT)
A.M. Best Co. has assigned an issuer credit rating of "a+" and affirmed the financial strength rating of A (Excellent) of Iron Horse Insurance Company (Iron Horse) (Burlington, VT). The outlook assigned to the ICR is stable, and the outlook for the FSR is stable.
The ratings reflect Iron Horse's superior risk-adjusted capitalization, experienced management team and the role it will play as a captive insurance company for Chevron Corporation (Chevron) [NYSE:CVX].
These positive rating factors are partially offset by the company's high net loss exposures as the coverages provided tend to result in claims that are characterized as low frequency but high severity. This is somewhat mitigated by Iron Horse's ability to secure capital from Chevron in the event of a covered shock loss. Iron Horse directly benefits from the attention of Chevron's experienced risk management team. Iron Horse also gains from Chevron's global operations, which provide favorable geographic spread of risk and line of business diversification.
In its role as a captive insurer, Iron Horse provides broad and competitive global insurance products for Chevron and its subsidiaries. Structurally, Iron Horse is a direct subsidiary of Chevron. Chevron owns four other active captives: Traders Insurance Ltd., which merged with Bermaco Insurance Company, Ltd. in December 2006, Heddington Insurance Limited (Hamilton, Bermuda), Heddington Insurance (UK) Limited (United Kingdom) and Puritan Assurance Ltd. A portion of the insurance needs of Chevron is supplied through these captive operations and the commercial market, with many of the insurance arrangements rationalized among the captives to enhance operating efficiencies. Iron Horse, along with the other Chevron captives, provides comprehensive coverage above Chevron's internal retentions, while its reinsurance is placed through a corporate wide plan with the world's significant providers of capacity, resulting in a diversified and balanced distribution of reinsurers.
A.M. Best remains the leading rating agency of captive insurers rating a wide variety of more than 200 captives in the United States and throughout the world.
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.