Hamilton: Global credit rating agency, AM Best has affirmed the financial strength rating of A (Excellent) and the long-term issuer credit rating of ‘a’ (Excellent) for Bermuda’s INPEX Insurance Ltd (IIL), with a stable outlook.

According to BERNAMA News Agency, the credit ratings reflect IIL’s very strong balance sheet, solid operating performance, neutral business profile, and appropriate enterprise risk management. The company’s risk-adjusted capitalisation remains at the strongest level, supported by low underwriting leverage and a conservative, liquid investment portfolio. Although IIL plans to gradually distribute surplus to its parent, INPEX Corporation of Japan, it is expected to maintain sufficient capital to support its operations.

AM Best noted that potential credit risks from IIL’s reliance on reinsurance are mitigated by the strong credit quality of its panel, which includes Everen Ltd, an energy sector mutual insurance company that INPEX joined in 2023. IIL has recorded robust underwriting results over the past five years, with an average combined ratio of below 40 percent and a return on equity of 6.4 percent.

In 2024, despite a moderate decline in premium income, the company delivered strong underwriting profits and stable investment income. IIL underwrites energy-related operational and construction risks for INPEX, covering property damage, third-party liability, and the operator’s extra expenses. Its business is expected to diversify further with INPEX’s expanding global footprint and new risk portfolios.

AM Best cautioned that negative rating actions could occur if IIL’s operating performance weakens or if INPEX’s credit profile deteriorates. Positive rating actions may follow if IIL shows sustained improvement in balance sheet metrics while consistently delivering strong underwriting results.