AM Best

SEPTEMBER 30, 2021 03:13 PM (EDT)

AM Best Affirms Credit Ratings of Oil Casualty Insurance, Ltd

 Clare Finnegan
Senior Financial Analyst
+1 908 439 2200, ext. 5165

Steven M. Chirico
+1 908 439 2200, ext. 5087
Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644


OLDWICK - SEPTEMBER 30, 2021 03:13 PM (EDT)
AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” (Excellent) of Oil Casualty Insurance, Ltd (OCIL) (Hamilton, Bermuda). AM Best also has affirmed the Long-Term Issue Credit Rating of “bbb” (Good) on the $200 million, 8.00% deferrable subordinated debentures, due Sept. 15, 2034. The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect OCIL’s balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management (ERM).

OCIL maintains risk-adjusted capital, as measured by Best’s Capital Adequacy Ratio (BCAR), in the strongest range. Capitalization has supported the company’s significant premium growth over the past few years as the company has been executing strategic diversification efforts as well as capitalizing on rate hardening in its market. The company’s diversification efforts have supplemented its primary mission as a stable capacity provider for the energy industry. Underwriting performance has been volatile over the prior five years, with the company experiencing some occasional shock losses. However, the company does use retrocessional reinsurance and limit management cover to mitigate its exposure. Investment returns have been accretive to the company’s results in four of the past five years.

The management team is seasoned, with its members having a number of years of experience in the insurance, financial and energy industries. The team also possesses a demonstrated track record of successfully implementing strategic initiatives.

Positive rating movement is not anticipated over the short term; diversification and growth initiatives will need to prove beneficial to the group’s operating performance over the intermediate term. Negative rating actions could result from a material reduction in OCIL’s risk-adjusted capitalization.

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 use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

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