[July 29, 2011]

A.M. Best Affirms Ratings Iron Horse Insurance Company

A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and issuer credit rating of "a+" of Iron Horse Insurance Company (Iron Horse) (Burlington, VT). The outlook for both ratings is stable.

The ratings reflect Iron Horse's adequate risk-adjusted capitalization, explicit parental support, experienced management team and the role it plays as a direct captive subsidiary of Chevron (News - Alert) Corporation (Chevron) [NYSE:CVX].

These positive rating factors are partially offset by Iron Horse's high net loss exposures, as the coverages provided tend to result in claims that are characterized as low frequency but high severity. This is somewhat mitigated by the captive's ability to secure capital from Chevron in the event of a covered shock loss. Iron Horse directly benefits from the attention of Chevron's experienced risk management team. Iron Horse also gains from Chevron's global operations, which provide favorable geographic spread of risk and line of business diversification.

In its role as a captive insurer, Iron Horse along with Heddington Insurance Limited currently provide broad and competitive global insurance products for Chevron and its subsidiaries. The insurance needs of Chevron are supplied through these captive operations, where appropriate and the commercial market.

Iron Horse and the other Chevron captves provide comprehensive coverage above Chevron's internal retentions, while Iron Horse's reinsurance is placed through a corporate wide plan with the world's leading providers of capacity, resulting in a diversified and balanced distribution of reinsurers.

A.M. Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated in the United States and throughout the world.

For current Best's Credit Ratings and independent data on the captive and alternative insurance market, please visit www.ambest.com/captive.

The principal methodology used in determining these ratings is Best's Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best's rating process and highlights the different rating criteria employed. Additional key criteria utilized include: "Risk Management and the Rating Process for Insurance Companies"; "Understanding Universal BCAR"; "Assessing Country Risk"; and "A.M. Best's Rating Methodology for Captive Insurance Companies." Methodologies can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2011 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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