Bermuda-based Bison Insurance Company Ltd. has been affirmed the financial strength rating of A- (excellent) and issuer credit rating of "a-" by AM Best Co. The outlook for both ratings is stable.

The ratings reflect Bison's historically adequate capitalisation, generally favourable operating performance, conservative reserve levels and effective management of its catastrophe exposures. They also recognise Bison's history of maintaining sufficient capital and financial resources to support its ongoing obligations.

Partially offsetting these positive rating factors are the company's volatile underwriting results due to the historically low loss frequency, relatively high loss severity nature of its risk profile, coupled with its high limits and high net retentions relative to surplus, said Best. Also, the continually changing risk profile of Bison's primary insured causes large profile changes that affect the captive. This is mitigated by Bison's conservative reserving philosophy and the ongoing, demonstrated support from its parent, Duke Energy Corporation.

The ratings agency said that Bison's long-term growth opportunities primarily depend on the business success of the parent company. Long-term, the captive will pursue additional lines of business, both from the parent organisation and its affiliates.