A.M. Best Assigns Ratings to Saturn Insurance Inc.

LONDON--(BUSINESS WIRE)-- A.M. Best Europe – Rating Services Limited has assigned a financial strength rating of A- (Excellent) and issuer credit rating of “a-” toSaturn Insurance Inc. (Saturn) (Burlington, Vermont, USA). The outlook assigned to both ratings is stable. Saturn is a captive of BP P.L.C. (BP) (United Kingdom), an integrated global oil and gas company.

The ratings of Saturn reflect its strong risk-adjusted capitalisation underpinned by excellent group reinsurance support provided by its sister company,Jupiter Insurance Limited (Jupiter), which carries an A.M. Best financial strength rating of A (Excellent). Saturn also benefits from low investment risk as it maintains half of its investments in cash or short-term deposits and the other half in loans back to BP with excellent liquidity conditions. The ratings also reflect BP’s strength and commitment to Saturn.

Saturn was formed in 2011 with the view to retain environmental liability policies in the United States and to serve as a vehicle to transfer workers’ compensation business currently retained by BP America Inc. Additional lines of business are not expected to be written soon; however, these may be considered in due course.

Currently, there is some uncertainty with regards to the timing of the transfer of the loss portfolio of workers’ compensation business; however, A.M. Best expects it to be at the latest in 2013.

Upward rating movements for Saturn could occur if total reinsurance support is provided by Jupiter.

Negative rating actions could occur if there were a significant deterioration in Saturn’s risk-adjusted capitalisation linked to no evidence of parental support. In addition, a significant deterioration in BP’s financial position would likely lead to a review of Saturn’s ratings.

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 utilised include: “Alternative Risk Transfer (ART)”; “Understanding Universal BCAR”; “Rating Members of Insurance Groups”; “Rating New Company Formations”; and “Risk Management and the Rating Process for Insurance Companies”. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.

A.M. Best Europe – Rating Services Limited is a subsidiary of A.M. Best Company.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.

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A.M. Best Europe – Rating Services Limited
Anandi Nangy-Kotecha
Associate Director
+(44) 207 397 0271
[email protected]
or
Carlos Wong-Fupuy
Senior Director
+(44) 207 397 0287
[email protected]
or
Rachelle Morrow
Senior Manager, Public Relations
+(1) 908 439 2200, ext. 5378
[email protected]
or
Jim Peavy
Assistant Vice President, Public Relations
+(1) 908 439 2200, ext. 5644
[email protected]

Source: A.M. Best Europe – Rating Services Limited