AM Best Affirms Credit Ratings of Stellar Insurance, Ltd.

OCTOBER 22, 2026 11:34 AM (EDT)

AM Best Affirms Credit Ratings of Stellar Insurance, Ltd.

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FOR IMMEDIATE RELEASE

LONDON - OCTOBER 22, 2026 11:34 AM (EDT)
AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of "a+" (Excellent) of Stellar Insurance, Ltd. (Stellar) (Bermuda), an indirectly wholly owned subsidiary of the Saudi Arabian Oil Company (SAOC). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Stellar'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. The ratings also reflect, in the form of rating enhancement, Stellar's strategic importance to its parent, SAOC.

Stellar's balance sheet strength is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR). Stellar's risk-adjusted capitalisation is expected to remain at the strongest level prospectively, supported by low net underwriting leverage, excellent internal capital generation and a comprehensive reinsurance programme. Similar to other captive insurers, the company maintains a simplified investment strategy, with approximately three-quarters of assets held in the form of a promissory note from its parent company. Terms of the note allow for quick access to funds, with liquidity supplemented by the remaining assets being held in high-quality fixed interest securities. Stellar remains reliant on reinsurance to provide high gross underwriting limits, although the associated counterparty risk is mitigated by the use of a diversified panel of financially strong reinsurers.

Stellar has demonstrated strong operating results over recent years, driven by robust underwriting profits in the absence of large losses. The company's four-year (2022-2025) weighted average IFRS 17 net/net combined ratio, as calculated by AM Best, was 2.6%, including reserve releases during the period, reflecting the company's conservative reserving approach. Stellar continued to generate strong profits in 2025 and the first half of 2026, driven by healthy underwriting and investment income. The captive has experienced minimal impact from the current conflict in the Middle East to date. AM Best expects the company's performance to remain strong, although subject to potential volatility in the long term due to its exposure to high severity, low frequency losses in its energy programme.

Stellar is a single-parent captive insurer of SAOC, playing a key role within the overall risk management framework of its parent. The captive provides transfer solutions for risks originating from SAOC's operations, as well as the operations of its affiliates and joint ventures.

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.

This press release relates to Credit Ratings that have been published on AM 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 AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings (BCR), Best's Performance Assessments (PA), Best's Preliminary Credit Assessments (PCA) and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.