Wednesday, June 4, 2008

Best Ratings Report

Editor's note: This information is courtesy of A.M. Best Co. For further information, visit

A.M. Best Co. has assigned a financial strength rating (FSR) of B++ (Good ) and an issuer credit rating (ICR) of “bbb+” to Roche Surety and Casualty Company, Inc (Tampa, FL). The outlook on both ratings is stable.

The ratings reflect the company’s strong capitalization, profitable operating results and the expertise and experience of its principals in the bail bond business. Somewhat offsetting these positive attributes is the company’s limited profile as a small, bail only writer of surety bonds.

The rating outlook reflects A.M. Best’s expectation that Roche Surety will continue to grow profitably through prudent underwriting while maintaining its strong controls over its agency force.


A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating (ICR) of “a-” of Through Transport Mutual Insurance Association Limited (TTB) (Bermuda) and its wholly owned subsidiary, TT Club Mutual Insurance Limited (TTI) (United Kingdom) (formerly known as Through Transport Mutual Insurance Association [EurAsia] Limited). The two companies collectively trade as TT Club. The ratings of TTI continue to reflect A.M. Best’s view that the company is an integral part of TT Club’s worldwide strategy. The outlook for both ratings remains stable.

A.M. Best believes that TT Club will maintain excellent risk-adjusted capitalisation in 2008-2009, despite some weakening in 2007. The company continues to benefit from a comprehensive catastrophe reinsurance programme, which has the advantage of extensive vertical and horizontal protection. A USD 30 million subordinated loan (issued in October 2006) also contributes to its strong level of capitalisation.

A.M. Best anticipates that TT Club will report combined ratios in the region of 105%-110% in 2008-2009, in line with its 108% combined ratio in 2007. TT Club is therefore likely to remain dependent on investment income to generate a profit over this period, making it vulnerable to falling interest rates and current uncertainty in financial markets. The club is taking steps to improve underwriting performance. Measures taken in 2008 include increasing the deductibles on loss-making accounts, expense savings and continued use of its loss prevention programme. However, A.M. Best believes that weakening market conditions are likely to somewhat counteract measures taken to improve the underwriting profit in 2008-2009.

In A.M. Best’s opinion, TT Club has a strong business profile in its niche market, focusing on the provision of insurance and risk management services to the international marine transport and logistics industry. The club’s superior service provision resulted in high policyholder retention of 96% in 2007.


A.M. Best Co. has assigned an issuer credit rating (ICR) of “a+” and affirmed the financial strength rating (FSR) of A (Excellent) of Heddington Insurance Limited (Heddington) (Hamilton, Bermuda). The outlook assigned to the ICR is stable, and the outlook for the FSR is stable.

The ratings reflect Heddington’s superior capitalization, consistently positive operating results and the role that the company plays as a captive insurance company of Chevron Corporation [NYSE:CVX].

These positive rating factors are partially offset by Heddington’s high net loss exposures, as the coverages provided tend to result in claims that are characterized as low frequency but high severity. This is somewhat mitigated by the captive’s good loss history supported by very strong investment income and parental support on loans to affiliated companies. Heddington has sufficient resources to meet its underwriting related obligations, as measured by A.M. Best’s capital adequacy model.

The ratings are based on the consolidated results of Heddington as well as its subsidiary, Heddington Insurance (U.K.) Limited (United Kingdom). The ratings further reflect risk management programs and underwriting coordination in the design and implementation of insurance policies offered by Heddington as well as the cost effective manner in which those services are delivered. Heddington also gains from its parent’s global scope, which provides it with a favorable geographic distribution of risks assumed.

In its role as a captive insurer, Heddington provides broad and competitive global insurance products for its ultimate parent, Chevron and its subsidiaries. In addition to Heddington and its subsidiary, Heddington Insurance (U.K.) Limited, the corporation currently owns three other active captives: Iron Horse Insurance Company (Burlington, VT), Puritan Assurance Ltd. and Traders Insurance Ltd., which merged with Bermaco Insurance Company Ltd. in December 2006. The insurance needs of the corporation are supplied through these captive operations, where appropriate, and the commercial market, with many of the insurance arrangements for the parent rationalized among captives to enhance operating efficiencies.

Heddington, along with the other Chevron captives, provides comprehensive coverage above Chevron’s internal retentions while its reinsurance is placed through a corporate wide plan with the world’s significant providers of capacity, resulting in a diversified and balanced distribution of reinsurers.

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