AM Best has affirmed the financial strength rating of A (excellent) and the long-term issuer credit ratings of “a+” (excellent) of Bermuda-domiciled Castle Harbour Insurance and Harrington Sound Insurance. The outlook for the ratings is stable.
Both are single parent captives owned by oilfield services giant, Schlumberger Limited.
Each captive carries relatively large limits within its designated coverages in general liability and property, but each writes a broad scope of business and has considerable geographic diversification.
They also maintain “significant” retentions, but are readily manageable within their respective capital bases and organic surplus growth, offset by periodic sizable dividends.
The ratings of Castle Harbour and Harrington reflect their balance sheet strength, which AM Best assesses as strongest, as well as their strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).
The ratings also take into consideration the captives’ strategic importance in providing insurance for the parent and its subsidiaries.
Castle Harbour and Harrington maintain the strongest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), and display “excellent” liquidity measures.
The operating performance assessments reflect the companies’ underwriting results driven by good loss history and benefiting from inherently low expense structures.
“As captive insurers of SLB, the companies are an integral part of the parent’s ERM framework, which includes defined risk controls and optimization of the captives’ capital,” AM Best said.
“Further, AM Best recognizes the financial flexibility afforded by their parent company, and their strategic importance across SLB.”