AM Best Affirms Credit Ratings of Sooner Insurance Company

Rhea-AI Summary

AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of 'a+' (Excellent) for Sooner Insurance Company based in Colchester, VT. The ratings have a stable outlook, reflecting Sooner's very strong balance sheet strength, strong operating performance, and appropriate enterprise risk management. Key metrics include robust risk-adjusted capitalization and favorable loss reserve development. Sooner primarily insures ConocoPhillips and its subsidiaries, which is essential due to ConocoPhillips’s strong balance sheet and positive earnings history.

Positive

• Affirmed Financial Strength Rating of A (Excellent) and Long-Term Issuer Credit Rating of 'a+' (Excellent).
• Stable outlook indicating reliable financial health.
• Very strong balance sheet strength supported by risk-adjusted capitalization.
• Strong operating performance with favorable loss experience for over a decade.

Negative

• None.

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a+” (Excellent) of Sooner Insurance Company (Sooner) (Colchester, VT). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Sooner’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

Sooner’s balance sheet strength is underpinned by its risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), generally favorable loss reserve development and low underwriting leverage. Sooner’s most significant asset is a loan back to its ultimate parent, ConocoPhillips [NYSE: COP]. The loan provides Sooner’s capital and is considered to have low risk due to the parent/subsidiary affiliation, as well as the parent’s strong balance sheet and history of positive earnings.

Sooner has a long track record of strong operating performance, driven by solid underwriting profits, with most return metrics outperforming the industry composite. The company’s loss experience has been largely favorable for more than a decade due in large part to ConocoPhillips’s strong risk management programs. As a core component in ConocoPhillips’ ERM program, the captive arrangement afforded the corporation flexibility to manage the largest loss efficiently and productively in its history from a claim late in 2021.

The company’s business profile assessment reflects its position as the captive insurer for its ultimate parent. Sooner’s underwriting risks mainly provide property damage and excess liability coverage to ConocoPhillips and its global subsidiaries and joint ventures.

Sooner’s ERM has a culture of risk awareness and a framework to identify and manage various types of risks continually, including periodic reviews of its potential loss exposures through a specialist within industrial risks, a process AM Best views as very appropriate for the company’s risk profile. The ratings also reflect the implicit support of ConocoPhillips and the critical role the captive plays in its ERM program.

AM 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.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230117005864/en/

Kourtnie Beckwith, CPCU, AU, AMIM

Senior Financial Analyst

+1 908 439 2200, ext. 5124

kourtnie.beckwith@ambest.com

Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com

Dan Teclaw

Director

+1 908 439 2200, ext. 5394

dan.teclaw@ambest.com

Al Slavin

Senior Public Relations Specialist

+1 908 439 2200, ext. 5098

al.slavin@ambest.com

Source: AM Best

FAQ

What is the significance of AM Best's ratings for ConocoPhillips (COP)?

AM Best affirmed a Financial Strength Rating of A (Excellent) for Sooner Insurance Company, a captive insurer for ConocoPhillips, indicating strong financial stability.

How does Sooner Insurance Company support ConocoPhillips?

Sooner provides property damage and excess liability coverage to ConocoPhillips and its subsidiaries, playing a critical role in its enterprise risk management program.

What does the stable outlook of Sooner Insurance Company imply?

A stable outlook from AM Best implies consistent performance and reliability in Sooner's financial strength and operational capabilities.

How has Sooner Insurance Company's operating performance been?

Sooner has a long track record of strong operating performance with solid underwriting profits and favorable loss experience.