Best Affirms Jupiter Ratings

A.M. Best Co. has affirmed the financial strength rating of “A+” (Superior) and the issuer credit rating of “aa-” of Guernsey-based captive Jupiter Insurance Limited with a stable outlook. Jupiter is the single parent captive of energy giant BP plc, and the ratings therefore “reflect the company’s superior risk-adjusted capitalization and excellent liquidity,” said Best.

Best said it “believes that Jupiter’s operating performance is likely to remain strong in 2006, with pre tax profits of approximately £395 million ($680 million) as it recovers from a series of large losses that impacted the company during 2005, including the explosion in the BP Texas City refinery and hurricanes Katrina and Rita.

“Underwriting performance is also expected to improve considerably to £300 million ($515 million) in 2006, from an underwriting loss of £440 million ($755 million) in 2005.”

Best also indicated that “Jupiter’s prospective risk-adjusted capitalization is likely to remain superior over the next two years as its claims revert back to previous levels, improving its capital base.” Best said it “believes that Jupiter has excellent liquidity provided by the short-term maturity of its discount note within the group. In A.M. Best’s opinion, despite the risk concentration within the group, this instrument provides Jupiter with a very good level of financial flexibility.”