OLDWICK, N.J.–(BUSINESS WIRE)–A.M. Best has affirmed the Financial Strength Rating of A
(Excellent) and the Long-Term Issuer Credit Rating of “a” of Park
Assurance Company (Park) (Burlington, VT). The outlook of these Credit
Ratings (ratings) is stable.
The ratings reflect Park’s balance sheet strength, which A.M. Best
categorizes as strongest, as well as its strong operating performance,
limited business profile and appropriate enterprise risk management.
The ratings acknowledge Park’s sophisticated risk management strategy,
conservative investment portfolio, experienced management team, and
integral role as a single-parent captive of JPMorgan Chase Holdings,
LLC, which is a subsidiary of JPMorgan Chase & Co. (JPMorgan Chase)
[NYSE: JPM], a leading global financial services group. Park provides
JPMorgan Chase with coverage related to its global property program,
including terrorism exposure, and, prior to 2017, its general liability
risks that remain a key component of the bank’s overall risk management
strategy. The captive in turn benefits from the explicit support of
JPMorgan Chase’s significant financial and extensive professional
Park is well-capitalized through retained earnings and maintains a
comprehensive reinsurance program with highly rated reinsures to
mitigate its exposure to oversized losses on substantially valued
insured locations. Park has reported consistently favorable pure loss
ratios in combination with its low-cost expense structure to produce
favorable operating earnings year-over-year. Despite the level of
capitalization, the captive is reliant on the protection afforded by the
Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA),
and while the TRIPRA program offers significant protection from
terrorism losses, the net impact on Park could still be burdensome.
Nevertheless, A.M. Best recognizes the low probability of such extreme
events and the support available to Park as a single-parent captive of
Negative rating action could occur in the event of the non-renewal of
TRIPRA, although it is mitigated as Park has the ability to terminate
all terrorism-related contracts if the Act is not renewed. Negative
rating action could occur due to a significant decline in risk-adjusted
capitalization from a sustained deterioration in earnings. Negative
ration action also could occur due to financial issues causing downward
pressure on the parent company’s credit profile.
A.M. 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 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 Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view Understanding
Best’s Credit Ratings. For information on the proper media
use of Best’s Credit Ratings and A.M. Best press releases, please view Guide
for Media – Proper Use of Best’s Credit Ratings and A.M. Best Rating
Action Press Releases.
A.M. Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit www.ambest.com
for more information.
Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.
Charlie Smentkowski, +1-908-439-2200, ext. 5684
Molineux, +1-908-439-2200, ext. 5829
Sharkey, +1-908-439-2200, ext. 5159
Manager, Public Relations
Peavy, +1-908-439-2200, ext. 5644
Director, Public Relations