Jupiter’s $6bn of reserves should absorb impact of Gulf oil rig accident, says AM Best
In response to a query from StrategicRISK Am Best said that BP’s Guernsey-based captive, Jupiter, should be able to absorb losses from the oil rig fire off the coast of the US without any significant rating changes.
Timothy Prince, financial analyst at AM Best, said: “Following the fire on the Deepwater Horizon rig, we have approached the captive's managers and our current understanding is that although BP is involved with the rig, it is not directly owned by them, but by a sub-contractor. We believe that Jupiter is likely to have some exposure to the incident, however, at present it is too early to be precise.”
Prince added that Jupiter's risk retention per occurrence is limited to $700m, compared to almost $6bn capital and surplus.
He continued: “In our view and based on this information, the captive should be able to absorb a maximum loss event without a significant impact on the current rating level, we will continue to monitor the situation and it's impact on the captive.”