Oil Insurance Ltd., a Bermuda mutual insurer, has escaped a second downgrade to its financial strength rating, it said this week.

Oil said the company's 'A-' financial strength and counterparty credit ratings were reaffirmed after it provided greater clarity to S&P on the financial impact of paying out claims from Hurricane Katrina, Rita and Wilma.

Standard & Poor's reaffirmed the company's ratings three months after raising concerns that hurricane losses sustained by Oil member companies could deplete the group's capital, the company said.

Oil's members are all energy companies, some with a presence in the Gulf of Mexico, which was battered by both Katrina and Rita.

Oil had been rated 'A+', but saw its rating downgraded to A- following Hurricane Katrina, a storm for which Oil has had to set aside $1 billion in reserves for claims. The August 29 storm is likely to go down in the record books as the most costly catastrophe ever.

Oil's losses from any one event are capped at $1 billion.

Oil, a company that insures the risks of its own members, recorded total losses of $1.25 billion in the third quarter, but the impact was minimised by a special board resolution that increased the premium rates its members paid in for 2005.

Oil's third quarter net loss was $371.8 million, helped also by $66 million in investment gains during the period.