S&P’s lowered its counterparty credit and financial strength ratings on Oil Insurance Ltd. to “A+” and placed the company on CreditWatch with negative implications because of catastrophe losses and a decline in capital adequacy in 2001.
Preliminary indications for first-quarter 2002 are positive, with close to breakeven underwriting results and significant improvement in the investment results. Oil Insurance Ltd. is expected to generate strong average RORs, with premium income rising significantly in 2002 and prospectively to recoup 2001 losses. Liquidity requirements and cash flow are more uncertain in the short term, but are expected to catch up to losses over the next 18-36 months with portfolio liquidations supporting cash flow as necessary in the interim.
Management expects to borrow less than $250 million in 2002. Even in the wake of high catastrophe activity, Bermuda-based Oil Insurance Ltd.’s unique retrospective rating will recapture all losses over the medium term.
Was this article valuable?
Here are more articles you may enjoy.
Viewpoint: Japan’s $550B Bet on America—What it Means for the US Insurance Market 
Viewpoint: Why Brokers Have Little to Fear and Everything to Gain From AI 
State Farm Agrees to $15M Settlement for Underpaid Vehicle Claims 
Chubb Q1 Net Income Increases 74% on Fewer Catastrophe Losses From This Issue
