Market Overview

A.M. Best Affirms Credit Ratings of INPEX Insurance, Ltd.


A.M. Best has affirmed the Financial Strength Rating of A-
(Excellent) and the Long-Term Issuer Credit Rating of "a-" of INPEX
Insurance, Ltd. (IIL) (Bermuda). The outlook of these Credit Ratings
(ratings) is stable.

The ratings reflect IIL's balance sheet strength, which A.M. Best
categorizes as very strong, as well as its adequate operating
performance, neutral business profile and appropriate enterprise risk

IIL's very strong balance sheet assessment mainly reflects its low
underwriting leverage and conservative investment portfolio. Given the
volume of risks that the company currently writes and retains, the
capital required to support its current book of business is relatively

IIL's underwriting results over the most-recent five-year period have
been consistently positive, contributing to an average combined ratio of
under 40%. Despite very strong underwriting margins, loss and combined
ratios have been volatile, owing primarily to a relatively small
in-force portfolio. A.M. Best expects IIL's operating performance to
remain profitable, although the company's underwriting results also
likely will remain volatile until the company can achieve much greater

IIL is a single-parent captive of INPEX CORPORATION (INPEX), which is
the largest oil and gas exploration and production company in Japan. In
its role as a single-parent captive, it provides coverage that mainly
consists of property damage, third-party liability and operator's extra
expenses for its parent, its affiliates and joint-venture companies. The
types of business written expose the company's performance to
high-severity, low-frequency losses. Nevertheless, IIL has managed this
risk through prudent underwriting and a robust reinsurance program with
conservative retention levels and limits.

The stable outlook reflects A.M. Best's expectation that IIL will
continue to deliver consistently positive operating results, supported
by a return to growth with strong underwriting margins and stable
investment yields.

Positive rating actions could occur if IIL continues to maintain its
very strong balance sheet strength, along with more stable underwriting
and operating results. Negative rating actions could occur if there is a
substantial increase in losses caused by a material shift in risk
appetite or significant erosion of capital. In addition, significant
deterioration in INPEX's credit profile could put downward pressure on
IIL's ratings.

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

Ratings are communicated to rated entities prior to publication.
Unless stated otherwise, the ratings were not amended subsequent to that

This press release relates to Credit Ratings 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
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Best's Credit Ratings
. For information on the proper media
use of Best's Credit Ratings and A.M. Best press releases, please view
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