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A.M. Best Affirms Credit Ratings of Saturn Insurance Inc.

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A.M. Best has affirmed the Financial Strength Rating of A-
(Excellent) and the Long-Term Issuer Credit Rating of "a-" of Saturn
Insurance Inc.
(Saturn) (Burlington, VT). Saturn is a captive of BP
p.l.c.
(BP), an integrated global oil and gas company. The outlook
of these Credit Ratings (ratings) remains stable.

The ratings reflect Saturn's balance sheet strength, which A.M. Best
categorises as strong, as well as its adequate operating performance,
limited business profile and appropriate enterprise risk management. The
ratings also consider rating lift from its reinsurer, Jupiter
Insurance Limited
(Jupiter), which is the principal captive of the
BP group and provides substantial reinsurance support to Saturn.

Saturn's balance sheet strength is supported by its risk-adjusted
capitalisation being at the strongest level, as measured by Best's
Capital Adequacy Ratio (BCAR). Saturn writes large gross lines relative
to the size of its capital base. However, reinsurance protects its
balance sheet against high severity, low frequency losses. Offsetting
rating factors remain the captive's high reinsurance dependence, and
relatively small capital base, which is exposed to potential volatility
from the exposure to large losses.

Saturn benefits from low investment risk with approximately half of its
assets invested in cash and cash equivalents. The remainder is composed
of callable loans with a BP affiliate, with excellent liquidity terms.

Saturn achieved strong operating results during the period 2013–2016;
however, a large workers' compensation claim negatively impacted its
performance in 2017, demonstrating its exposure to volatility. Saturn's
strong performance track record has supported growth in capital and
surplus of 43% since its incorporation in 2011, with no dividends paid
out during this period.

Saturn's business profile is assessed as limited, reflecting its small
and concentrated portfolio of high-risk products provided to the BP
group in the United States. Saturn's portfolio consists primarily of
terrorism cover, certificate of financial responsibility, workers'
compensation insurance and environmental protection agency cover. The
captive's premiums have been impacted negatively by the soft rate
environment over the past three years, with its gross written premiums
reducing by approximately 60% since 2014.

A.M. Best remains the leading rating agency of alternative risk transfer
entities, with more than 200 such vehicles rated 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 rating(s) that have been published on
A.M. 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 A.M. Best's
Recent
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Understanding
Best's Credit Ratings
. For information on the proper media
use of Best's Credit Ratings and A.M. Best press releases, please view
Guide
for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating
Action Press Releases
.

A.M. Best is the world's oldest and most authoritative insurance
rating and information source. For more information, visit
www.ambest.com.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

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