[0] A.M. Best Affirms Rating of ACE European Markets Reinsurance.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Dec. 12, 2001 A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the A+ (Superior) financial strength rating of ACE European Markets Reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. Limited (AEMR AEMR Acquisition Executive Management Report AEMR Airframe Engine Maintenance and Repair ). The rating reflects A.M. Best's view of AEMR as a core subsidiary of its ultimate parent, ACE Bermuda Insurance Limited (ACE Bermuda), which is a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of ACE Limited (NYSE NYSE See: New York Stock Exchange : ACE). AEMR's parent provides it with a quota share For This article is about quota shares (shares of the quota). For other usages of quota, see, see . A quota share is a specified number or percentage of the allotment as a whole (quota), that is prescribed to each individual entity (see Non-tariff barriers to trade). reinsurance agreement, efficient management and a strengthened capital base and business position. Offsetting these strengths is the company's reliance on a small number of contracts to generate most of its premium income. The company satisfies A.M. Best's requirements for reinsurance affiliation and therefore assumes the current group rating of A+ (Superior). Parental reinsurance support--The quota share reinsurance agreement between AEMR and ACE Bermuda came into effect 1 September 1997, and was revised 1 January 2001. Under the agreement, AEMR cedes between 85% and 90% of all gross premiums underwritten, although the 90% limit may be exceeded by mutual agreement. A separate stop loss agreement provides the company with protection against accumulation of losses within its retention. Efficient management--In addition to financial support, AEMR benefits from management and technical resources available within the ACE group. The company's investment management is coordinated with the investments of the ACE group. Strengthened capital base--AEMR received a capital injection of USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 45 million in September 2001, taking its capital position to USD 100 million. A.M. Best believes this level of capital to be sufficient to support the company's expected premium growth between 2001 and 2003. Strengthened business position--The company is in the process of strengthening its finite reinsurance Finite Reinsurance A type of reinsurance that transfers over only a finite or limited amount of risk. Risk is reduced through accounting or financial methods, along with the actual transfer of economic risk. market position and continues to build its traditional reinsurance business through the introduction of new products. This strategy has proved successful, resulting in substantial growth in premium income. Expectations - The company is likely to continue to satisfy A.M. Best's key 'reinsured rating criteria' of parental majority ownership and a minimum of 80% retrocession of gross premium through the parent. - A.M. Best believes that gross premium at year-end 2001 will exceed GBP 185 million, nearly 13 times 1999 gross premium. - The company is likely to achieve further substantial growth in the European finite reinsurance market. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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