AM Best has affirmed the financial strength rating of A (Excellent) and the long-term issuer credit ratings of a+ (Excellent) of Bermuda-domiciled captive insurers Castle Harbour Insurance Limited and Harrington Sound Insurance Limited.

The companies are captives for Schlumberger Limited, a leading provider of technology for reservoir characterisation, drilling, production and processing for the oil and gas industry.

The outlook of these credit ratings is stable.

The agency said that the ratings of Castle Harbour and Harrington reflect their balance sheet strength, which AM Best assesses as strongest, as well as their strong operating performance, neutral business profile and appropriate enterprise risk management.

The ratings recognise that Castle Harbour and Harrington maintain the strongest level of risk-adjusted capitalisation, as measured by Best’s capital adequacy ratio, as well as their strong operating performance metrics over each of the past five years.

In addition, the ratings consider the captives’ strategic importance in providing tailored insurance coverages for the parent and its subsidiaries. Although each captive carries relatively large limits within its respective designated coverages for the parent in the general liability and property lines of business, each writes a broad scope of business and has considerable geographic diversification.

As captive insurers of Schlumberger, the agency said, the companies benefit from, and are an integral part of, the parent’s ERM framework, which includes defined risk controls and optimisation of the captives’ capital.

Further, AM Best recognises the financial flexibility afforded by their parent company.