AM Best has affirmed the A- financial strength rating of Oil Casualty Insurance Ltd with a stable outlook.

Ocil is a Bermudian-based mutual, providing coverage primarily to its shareholders from the energy industry, but writing some third-party business too.

Best said the ratings reflected Ocil’s “strong risk-adjusted capitalisation, generally solid operating profitability and diversified asset portfolio”.

Ocil has diversified its business in recent years, expanding into direct and facultative property coverage within the energy sector and some property/casualty insurance to global companies outside the energy industry.

The rating agency viewed this diversification positively, saying it reduced the volatility of Ocil’s overall book of business.

Incidents like the 2010 Deepwater Horizon disaster in the Gulf of Mexico represented a risk to Ocil, but this risk was mitigated by retrocessional reinsurance bought by the company, Best added.