View this article online: https://www.claimsjournal.com/news/international/2010/06/22/110947.htm
A.M. Best Co. has downgraded the financial strength rating (FSR) to ‘A’ (Excellent) from ‘A+’ (Superior) and issuer credit rating (ICR) to “a” from “aa-” of Guernsey-based Jupiter Insurance Limited, a captive of BP plc. The outlook for both ratings remains negative.
Best explained that the “downgrade and negative outlook reflect concerns over the potential impact on BP of the ongoing Deepwater Horizon oil spill in the Gulf of Mexico. Although BP has recently agreed to establish a $20 billion claims fund, given the magnitude of this event, it is currently impossible to assess the ultimate impact on BP, both in terms of financial liabilities and reputational damage.”
Best also warned of “significant uncertainties”, which are “likely to remain for some time to come,” and indicated that it would continue to monitor the situation.
Best concluded, however, that it considers the financial position of Jupiter itself as being “likely to remain strong following this incident. Although Jupiter has established loss reserves at its policy limit of $700 million, risk-adjusted capital still soundly supports the rating level.”
Source: A.M. Best