A.M. Best Affirms A+ -Excellent- Rating On Everest Reinsurance Co.OLDWICK, N.J.--(BUSINESS WIRE)--Sept. 20, 1999-- A.M. Best Co. today 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. its A+ (Excellent) rating on Everest 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. Co. and two reinsured subsidiaries, Everest National Insurance Co. and Everest Indemnity Insurance indemnity insurance Managed care A type of health insurance in which a Pt can choose the hospital and provider, and the insurer reimburses the Pt or provider for a set percentage of the cost, minus deductibles and co-payments Co. The affirmation follows the group's recent announcement of its corporate restructuring plans, which are intended to establish an offshore domicile domicile (dŏm`əsīl'), one's legal residence. This may or may not be the place where one actually resides at any one time. The domicile is the permanent home to which one is presumed to have the intention of returning whenever the purpose as the ultimate parent holding company and a highly capitalized Bermuda reinsurer re·in·sure tr.v. re·in·sured, re·in·sur·ing, re·in·sures To insure again, especially by transferring all or part of the risk in a contract to a new contract with another insurance company. to complement its strong U.S. foothold foot·hold n. 1. A place providing support for the foot in climbing or standing. 2. A firm or secure position that provides a base for further advancement. foothold Noun 1. . The new corporate structure supports Everest Re's expansion strategies by providing a tax-effective platform to pursue future acquisitions and international business opportunities in addition to potential product enhancements. The restructuring also enables the group to optimize earnings performance by maximizing its future tax efficiencies. As part of the proposed restructuring, the U.S. holding company and the group's immediate parent will issue a combination of $450 million of debt and trust-preferred securities A Trust preferred security is a security possessing characteristics of both equity and debt issues. A company creates trust-preferred securities by creating a trust and issuing debt to the new entity, while the trust issues the trust preferred securities. . The proceeds of these issues will be distributed to its Bermuda parent, with $400 million subsequently transferred to a newly formed Bermuda reinsurance affiliate to provide its initial capitalization. As a result of these actions, the parent holding company's financial leverage will be modestly elevated with debt and debt-like instruments comprising almost one-quarter of its overall capital. However, this increased leverage position remains within A.M. Best's acceptable ranges for the group's rating level. In addition, Everest Re's strong earnings capacity provides coverage equal to roughly seven times borrowing costs. Everest Re's Superior rating continues to reflect the group's strong and improving financial trends, significant balance sheet flexibility, and well-established presence in the global reinsurance markets, all of which will be further enhanced by its new corporate structure. These positive factors are derived from the group's continued adherence to sound underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. principals, multi-channel distribution strategy and diverse risk portfolio. The group's restructuring initiatives--combined with the extensive expense-reduction initiatives, improved catastrophe management and tighter underwriting controls--position it for continued strong earnings despite difficult market conditions. Accordingly, A.M. Best views Everest Re's rating outlook as stable. A.M. Best Co., established in 1899, is America's oldest and most widely recognized insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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