21 November 2017
Reporter: Barney Dixon

JPMorgan Chase captive ratings affirmed

Park Assurance Company, the single-parent captive of JPMorgan, has had its financial strength rating of “A (Excellent)” and long-term issuer credit rating of “a” affirmed by A.M. Best.

A.M. Best explained that the ratings reflect Park Assurance’s “excellent” risk-adjusted capitalisation, operating performance, liquidity position, sophisticated risk management strategy and practices and investment strategy.

Park Assurance also provides JPMorgan Chase with very high insurance limits and insures properties with substantial insured values, according to A.M. Best.

The rating agency explained that the captive provides global property coverages, including terrorism, bankers blanket bond and professional liability, which are “key components” of JPMorgan Chase’s risk management strategy.

Park Assurance benefits from JPMorgan Chase’s significant financial resources.

The ratings agency said that it views Park’s enterprise risk management practices as “strong given its close alignment with its parent and the positive impact JPMorgan Chase has on Park’s corporate risk culture and its ability to measure, manage and mitigate risk in a prudent and optimal manner”.

It added: “Other factors considered in the rating process include, but are not limited to, the diversification in Park’s lines of business and geography and the explicit and implied support and commitment of JPMorgan Chase.”

Rating factors that could lead to negative rating actions for Park Assurance, include material losses outside of management expectations, a significant decline in its risk-adjusted capitalisation, and operating performance results that do not meet A.M. Best’s expectations.

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