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AM Best Affirms Credit Ratings of ICM Assurance Ltd

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AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of "a-" of ICM Assurance Ltd (ICMA) (St. Michael, Barbados). The outlook of these Credit Ratings (ratings) remains stable.

The ratings reflect ICMA's balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

ICMA is a single-parent captive insurer, wholly owned by CNOOC International Limited, which is in turn wholly owned by CNOOC Limited (CNOOC) (NYSE:CEO), ultimate parent.

The balance sheet strength is fortified by ICMA's risk-adjusted capitalization being at the strongest level, as measured by Best Capital Adequacy Ratio (BCAR), generally favorable trend of earnings, good liquidity and low underwriting leverage. ICMA's high gross loss potential due to the nature of the insurance provided for oil and gas exploration, which is subject to high severity losses, is tempered partially by the extensive loss control and group-wide safety programs provided by its ultimate parent, which help mitigate losses arising from its parent's ordinary course of business. The captive's investments are highly concentrated in a loan to its parent, reflecting strong mutual reliance and support of the parent and ultimate parent.

ICMA generally has reported adequate operating results, primarily driven by favorable underwriting results in the absence of large losses. While favorable operating performance has been good in the most recent five years, underwriting results are volatile and susceptible to occasional outsized losses. The captive's loss experience generally has remained favorable due in part to the absence of catastrophe events and to its inherent underwriting expertise, which incorporates strong loss control programs adopted by the parent.

The neutral business profile assessment is driven by ICMA's fundamental role as a single-parent captive of CNOOC, whose management incorporates ICMA as a core element of the enterprise's overall risk management safety and risk mitigation programs. The captive provides liability and property coverages to the parent company and its affiliates globally.

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 media use of Best's Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best's Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data provider specializing in the insurance industry. The company does business in more than 100 countries. Headquartered in Oldwick, NJ, AM Best has offices in cities around the world, including London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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