Guernsey based Jupiter downgraded to A (Excellent) with negative outlook
A.M. Best Co. has downgraded the financial strength rating (FSR) of BP’s Guernsey based captive, Jupiter, to A (Excellent) from A+ (Superior).
The rating agency also downgraded Jupiter’s issuer credit rating (ICR) to “a” from “aa-”. The outlook for both ratings remains negative.
The downgrade and negative outlook reflect concerns over the potential impact on BP of the ongoing Deepwater Horizon oil spill in the Gulf of Mexico. Although BP has recently agreed to establish a $20bn claims fund, given the magnitude of this event, it is currently impossible to assess the ultimate impact on BP, both in terms of financial liabilities and reputational damage. Significant uncertainties are likely to remain for some time to come, and A.M. Best will continue to monitor the situation.
A.M. Best considers that the financial position of Jupiter itself is likely to remain strong following this incident. Although Jupiter has established loss reserves at its policy limit of $700m, risk-adjusted capital still soundly supports the rating level.
No comments yet