Two captives owned by energy giant Phillips 66 have had their financial strength ratings of ‘A’ (Excellent) and long-term issuer credit ratings (long-term ICR) of “a” (Excellent) affirmed by AM Best.
Radius Insurance Company is domiciled in the Cayman Islands, while Spirit Insurance Company is domiciled in Vermont.
Phillips 66 also owns SCH Insurance Company, a Texas-domiciled captive established in 2014, which is not rated.
Earlier this year Spirit received approval from the Department of Labor (DoL) to begin reinsuring the Phillips 66 group life insurance plan, which is being fronted by Zurich American Life Insurance Company.
Spirit provides property damage, business interruption, construction all risks, excess liability and employee medical reimbursement insurance to Phillips 66 and its US operations, while Radius provides similar coverages to the group’s overseas operations.
Spirit also provides terrorism coverage supported by reinsurance protection provided by the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA).
The ratings reflect Spirit’s and Radius’ balance sheet strength, which AM Best assesses as very strong, as well as each company’s adequate operating performance, neutral business profile and appropriate enterprise risk management. The outlook for the ratings is stable.
“Spirit and Radius each have inherent benefits of financial flexibility and support as captive insurers for their ultimate parent, Phillips 66,with integrated operations, closely aligned and uniform interests and establishment as core elements in its overall risk management program,” the ratings report stated. “The captives’ loss experience has remained generally favorable due to the parent’s strong loss control program and to a relatively small number of material catastrophe losses. Phillips 66 conducts periodic reviews of Spirit’s and Radius’ potential loss exposures through an industrial risks specialist.”