Additionally, Spirit provides terrorism coverage to its parent. While terrorism risk exposure remains relatively high on a gross basis, concerns are mitigated by reinsurance protection afforded by the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA). However, due to the temporary nature of TRIPRA, A.M. Best will continue to monitor the company's gross terrorism risk exposure over time as it relates to the company's risk management practices and overall capacity.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 . A.M. Best is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. Copyright © 2016 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.
A.M. Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of "a" of Spirit Insurance Company (Spirit) (Burlington, VT ) and Radius Insurance Company (Radius) (Cayman Islands). The outlook of these Credit Ratings (ratings) is stable. The rating affirmations reflect Spirit's and Radius' excellent risk-adjusted capitalization, sound risk management practices, history of profitable business written from a predecessor captive, as well as the position they hold as the captive insurers for their ultimate parent, Phillips 66 [NYSE: PSX]. The ratings also consider the level of commitment on the part of Phillips 66, whose management incorporates Spirit and Radius as core elements in its overall risk management program. Partially offsetting these positive rating factors are Spirit's and Radius' exposure to large losses due to the limits offered on their respective policies and their significant dependence on reinsurance protection. In addition, Spirit's terrorism risk exposure remains relatively high on a gross basis. Spirit provides property damage, business interruption and excess liability insurance to Phillips 66 and affiliates and subsidiaries related to domestic U.S. operations only, while Radius provides similar coverage (property damage, business interruption, excess liability), as well as marine hull and cargo insurance to Phillips 66 and affiliates, and subsidiaries related to non-U.S. risks in which Phillips 66 has ownership interests. Business is written separately by Spirit and Radius, and each company has a history of strong underwriting results and operating returns. The captives' loss experience has remained favorable due in part to no material catastrophe events and the strong loss control programs at the parent. Phillips 66 conducts periodic reviews of Spirit's and Radius' potential loss exposures through an industrial risks specialist. Although the majority of Spirit's capital is loaned to its parent, there is limited counterparty risk due to the affiliation of the two companies and the alignment of interests.