OLDWICK, N.J.--(BUSINESS WIRE)--
A.M. Best Co. has affirmed the financial strength rating of A
(Excellent) and issuer credit rating of “a+” of Heddington Insurance
Limited (Heddington) (Bermuda). The outlook for both ratings is
The ratings reflect Heddington’s superior capitalization, consistently
positive operating results and the role that it plays as a captive
insurance company of Chevron Corporation (Chevron) [NYSE:CVX].
These positive rating factors are partially offset by Heddington’s high
net loss exposures, as the coverages provided tend to result in claims
that are characterized as low frequency but high severity. This is
somewhat mitigated by the captive’s good loss history supported by very
strong investment income and parental support provided by high yield
loans to affiliated companies. Heddington has sufficient capital
resources to meet its underwriting related obligations, as measured by
Best’s Capital Adequacy Ratio (BCAR).
The ratings are based on the consolidated results of Heddington. The
ratings further recognize the company’s strong enterprise risk
management controls and underwriting expertise and loss controls offered
in the structuring of insurance coverages offered by Heddington, as well
as the cost effective manner in which those services are delivered.
Heddington also gains from Chevron’s global scope, which provides it
with a favorable geographic distribution of assumed risks.
In its role as a captive insurer, Heddington, along with Iron Horse
Insurance Company (another active Chevron captive), currently
provides broad and competitive global insurance products for Chevron and
its subsidiaries. The insurance needs of Chevron are supplied through
these captive operations (where appropriate) and the commercial market.
Heddington and the other Chevron captives provide comprehensive coverage
above Chevron’s internal retentions, while Heddington’s reinsurance is
placed through a corporate wide plan with the world’s leading providers
of capacity, resulting in a diversified and balanced distribution of
A.M. Best remains the leading rating agency of alternative risk transfer
entities, with more than 200 such vehicles rated in the United States
and 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.
The methodology used in determining these ratings is Best’s Credit
Rating Methodology, which provides a
comprehensive explanation of A.M. Best’s rating process and contains the
different rating criteria employed in the rating process. Key criteria
utilized include: “Alternative Risk Transfer”; “Risk Management and the
Rating Process for Insurance Companies”; “Understanding Universal BCAR”;
and “Assessing Country Risk.” Best’s Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright © 2012 by A.M. Best Company, Inc.ALL RIGHTS
A.M. Best Co.Janet HernandezSenior
Financial Analyst908-439-2200, ext. firstname.lastname@example.orgRobert
DeRoseVice President908-439-2200, ext. email@example.comRachelle
MorrowSenior Manager, Public Relations908-439-2200,
PeavyAssistant Vice President, Public Relations908-439-2200,
Source: A.M. Best Co.