AM Best Affirms Excellent Ratings for Jupiter Insurance Limited, a Captive Insurer of BP
AM Best, a global credit rating agency, has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) for Jupiter Insurance Limited, a captive insurer of BP. The ratings reflect Jupiter’s strong balance sheet, excellent operating performance, neutral business profile, and appropriate enterprise risk management. The outlook for these ratings is stable.
Jupiter’s balance sheet strength is assessed as very strong, supported by its risk-adjusted capitalization at the highest level. However, the captive’s concentrated investment portfolio and high underwriting limits could lead to volatility in its solvency position in the event of significant losses. Despite this, AM Best expects Jupiter’s capital buffers to remain solid, with shareholders’ equity of USD 6.2 billion at year-end 2022.
The captive has reported strong operating results over the past five years, driven by robust underwriting profits. However, its operating performance is subject to volatility due to exposure to high-severity, low-frequency losses. In 2022, a fire in one of BP’s refineries led to a higher combined ratio, but overall, Jupiter has maintained a favorable performance.
Jupiter’s business profile assessment highlights its crucial role in BP’s risk management framework as its principal captive insurer. The captive mainly underwrites onshore and offshore property damage and business interruption cover. While declining insured values and market conditions have impacted premium income in recent years, Jupiter remains an essential instrument for BP’s insurance protection optimization.
AM Best recognizes Jupiter’s significant contribution to BP’s risk management by providing reinsurance to its sister company, Saturn Insurance Inc.
AM Best is a leading rating agency for alternative risk transfer entities, with a global presence. For more information on the captive and alternative risk transfer insurance market, visit www.ambest.com/captive.
About AM Best:
AM Best is a global credit rating agency, news publisher, and data analytics provider specializing in the insurance industry. With offices around the world, AM Best provides comprehensive ratings and analysis for insurance companies.
In conclusion, AM Best’s affirmation of Jupiter Insurance Limited’s excellent ratings underscores its strong financial position and performance as a captive insurer for BP. Jupiter’s role in BP’s risk management framework remains pivotal, allowing the company to optimize its insurance protection.