Oil Insurance Ltd.'s debt ratings have been affirmed by Fitch Ratings in spite of the company having suffered a number of large adverse claims in recent years.

Fitch said yesterday that the `F1' ratings on short-term commercial paper reflected "OIL's leading market position, ability to recover losses from members, and reasonable capitalisation and financial leverage".

"Weighted against these positives are underwriting volatility inherent in the property catastrophe line, concentration risk in an unstable energy industry, and high allocation of equities in its investment portfolio," Fitch said.

OIL provides catastrophe coverage to the energy industry, insuring physical damage to property, well control, and pollution liability.

Fitch noted that OIL is well positioned to grow in the current commercial market capacity crisis environment, having added 22 members in 2002 and three so far in 2003, for a total of 81 members/policyholders.