A.M. Best Affirms Financial Strength Rating of Credit & General Insurance Limited.OLDWICK, N.J. -- A.M. Best Co. has downgraded the financial strength rating to A- (Excellent) from A (Excellent) of Credit & General Insurance Limited (CGIL CGIL Confederazione Generale Italiana del Lavoro (Italian General Confederation of Labor) ) (New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. ). The rating has been removed from under review and assigned a stable outlook. The rating downgrade reflects the recent change in ownership of CGIL. Fisher and Paykel Appliances Holdings (F&P) acquired the company from Farmers Finance Business in November 2003. Under the new ownership structure, F&P has arranged a 20-year exclusive right distribution agreement with the Farmers Retail Business, which has enabled continuity of its business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets . The underwriting activities of CGIL primarily depend upon the future operating performance of Farmers Retail Business, which is now owned by a separate organization--James Pascoes Limited. Offsetting factors include CGIL's strong capitalization, consistent operating performance and liquid investment portfolio. CGIL has maintained a stable operating performance over the last five years. Supported by the extensive market presence of Farmers Retail Business, CGIL has been able to accumulate an underwriting portfolio which had a low combined ratio at 65% in 2003. Despite the recent change in ownership, CGIL maintains its core distribution channel to utilize the extensive branch network of Farmers Retail Business throughout the New Zealand market. Its operating ratio Operating Ratio A ratio that shows the efficiency of management by comparing operating expense to net sales: has been consistently below 60% over the last 3 years. The Best's Capital Adequacy Ratio Capital adequacy ratio (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR)[], is a ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss. (BCAR BCAR Brunswick County Association of Realtors BCAR British Civil Airworthiness Requirements BCAR Bullitt County Animal Rescue (Shepherdsville, KY) BCAR Business Case Analysis Report BCAR Beaver Creek Array BCAR Buffalo Civic Auto Ramps, Inc. ), which measures capitalization on a risk-adjusted basis, indicates that the company is strongly capitalized as of fiscal year-end Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. 2003. This adjusted capital and surplus increased by 14.0% in 2003, compared to 10.5% in 2002. CGIL maintains strong liquidity with more than 89% of its assets in cash and government bonds. The prudent asset mix has resulted in a stable stream of investment yields which further enhance the profitability of the company. 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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