AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of INPEX Insurance, Ltd. (IIL) (Bermuda). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect IIL’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.
IIL’s risk-adjusted capitalisation is assessed at the strongest level, as measured by Best’s Capital Adequacy ratio (BCAR). The company’s balance sheet strength is supported by its low net underwriting leverage and a highly conservative and liquid investment portfolio. Despite IIL’s distribution plan of accumulated surplus to the parent company, INPEX CORPORATION (INPEX), IIL is expected to maintain a sufficient capital buffer to support its book of business. IIL has relatively high reinsurance dependence; however, its credit risks are partially mitigated by the good credit quality of its reinsurance panel. The company also secures stable reinsurance capacity from Everen Limited (Everen), an energy sector-dedicated mutual insurance company.
IIL’s operating performance assessment reflects its strong underwriting results with an adjusted five-year average combined ratio of below 30% (2021-2025) excluding the accrual of theoretical withdrawal premium, as calculated by AM Best. Although IIL’s accrual of theoretical withdrawal premium for the membership of Everen will likely add some pressures on the bottom line, AM Best expects IIL to deliver a strong underwriting performance with a prudent approach in underwriting and retention over the medium term. IIL’s top line revenue remained stable in 2025, but various new projects by INPEX are expected to generate additional premium income within a few years. The company’s investment income is expected to remain strong over the medium term, due to favorable interest rate environment.
IIL is a single-parent captive of INPEX, which is the largest oil and gas exploration and production company in Japan. IIL underwrites energy-related operational and construction risks with coverage that mainly encompasses property damage, third-party liability and operator’s extra expenses for its parent group. Although there is some product/geographic concentration, AM Best expects that the company’s business will become increasingly diversified following INPEX’s expanding global footprint and IIL’s plan to underwrite new risks.
Negative rating actions could occur if IIL’s operating performance deteriorates to a level no longer supportive of the current assessment. In addition, any significant deterioration in INPEX’s credit profile, including its operating profitability, financial leverage and interest coverage levels, could lead to downward pressure on IIL’s ratings. Positive rating actions could occur if IIL demonstrates sustained improvement in its balance sheet strength metrics, while consistently delivering strong underwriting results.
AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated 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.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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