A.M. Best Affirms Credit Ratings of Park Assurance Company
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 resources.
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 JPMorgan Chase.
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.
A.M. Best
Charlie Smentkowski, +1-908-439-2200, ext. 5684
Financial Analyst
charlie.smentkowski@ambest.com
or
Susan Molineux, +1-908-439-2200, ext. 5829
Associate Director
susan.molineux@ambest.com
or
Christopher Sharkey, +1-908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +1-908-439-2200, ext. 5644
Director, Public Relations
james.peavy@ambest.com
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