Bermuda-based Stellar Insurance, an indirectly wholly owned subsidiary of the Saudi Arabian Oil Company (SAOC or Saudi Aramco), has experienced minimal impact from the current conflict in the Middle East to date, says AM Best.
The global credit rating agency 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.
In recent years, Stellar has demonstrated strong operating results, 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.
Ratings affirmed
AM Best has affirmed Stellar’s Financial Strength Rating of ‘A ‘(Excellent) and Long-Term Issuer Credit Rating of ‘a+’ (Excellent). The outlook of these credit 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 is a single-parent captive insurer, 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. SAOC is the national oil company of Saudi Arabia and one of the world's largest integrated oil and gas companies.