AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of ICM Assurance Ltd (ICMA) (St. Michael, Barbados). ICMA is a single-parent captive insurer, wholly owned by CNOOC International Limited, which is in turn wholly owned by CNOOC Limited (CNOOC), the ultimate parent. The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect ICMA’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile, and appropriate enterprise risk management (ERM), augmented by rating enhancement that it receives from its ultimate parent, CNOOC. The ratings also incorporate AM Best’s blended view of ICMA’s captive exposures diversified globally among countries with largely predictable or developing legal, business and regulatory environments.
AM Best expects ICMA’s strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), to remain at a similar level prospectively. The balance sheet strength assessment also considers ICMA’s low underwriting leverage and strong liquidity measures. ICMA’s surplus consists of capital and underwriting profits retained in the captive and loaned back to its parent. The loan is repayable on demand with counterparty risk curbed due to the affiliation and the aligned interests of the two companies. In addition, the captive’s gross loss potential is elevated as it remains exposed to high severity events, due to the nature of the insurance ICMA provides for CNOOC’s oil and gas exploration. However, this risk is partially offset by safety programs and loss control provided by CNOOC, while reinsurance protection is placed to limit the captive’s net exposure to shock loss events.
ICMA has reported solid operating results, aggregating significant net operating profits recorded over the past five years. The captive’s loss experience remains favorable due to infrequent material catastrophic events, management’s inherent knowledge of the business and the strong loss control programs adopted at the parent level. ICMA’s business profile assessment considers its role as a single-parent captive providing global liability and property coverages to its ultimate parent and affiliates.
ICMA’s ratings receive lift from the ultimate parent due to implicit and explicit support, as well as other inherent benefits the captive receives from CNOOC. ICMA is considered a core element of CNOOC’s overall risk management and risk mitigation program and serves a critical role in delivering coverage and access to reinsurance for specific risks of its parent, subsidiaries and affiliates.
AM 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.
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 Performance Assessments, 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. For more information, visit www.ambest.com.
Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
Senior Financial Analyst
+1 908 882 2336
Associate Director, Public Relations
+1 908 882 2310
+1 908 882 2390
Senior Public Relations Specialist
+1 908 882 2318