A.M. Best Affirms Financial Strength Ratings of the Subsidiaries and Debt Ratings of the W.R. Berkley Corp.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Nov. 22, 2002 A.M. Best Co. has affirmed the financial strength ratings of the subsidiaries of W.R. Berkley Corp. (Greenwich, Conn.) (NYSE NYSE See: New York Stock Exchange :BER (1) (Basic Encoding Rules) A set of encoding rules for ASN.1 notation, which is a method for defining data structures. See ASN.1. (2) (Bit Error Rate) The average number of bits transmitted in error. See BERT. 1. ). These affirmations include the financial strength ratings of A (Excellent) of Berkley Insurance Group (Wilmington, Del.), Berkley Regional Group (Greenwich, Conn.), Nautilus nautilus, in zoology nautilus, cephalopod mollusk belonging to the sole surviving genus (Nautilus) of a subclass that flourished 200 million years ago, known as the nautiloids. Insurance Group (Scottsdale, Ariz.) and Carolina Casualty Insurance Co. (Jacksonville, Fla.). Additionally, the financial strength rating of A+ (Superior) of Admiral Insurance Set up in 1993, Admiral, part of the Admiral Group, is a car insurance specialist mainly targeting those who traditionally pay higher than average premiums, including drivers under 35 and those living in big cities and in Scotland. Group (Wilmington, Del.) is also affirmed. Carolina Casualty's rating outlook is negative. The remaining rating outlooks are stable. Further, A.M. Best has affirmed the "bbb" rating of senior debt securities issued by W.R. Berkley Corp., the "bbb-" rating of trust preferred securities issued by the W.R. Berkley Capital Trust and the ratings of securities under the company's shelf registration, which include "bbb" of senior debt, "bbb-" of subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". , "bbb-" of trust preferred and "bb+" of preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. . The outlooks for these ratings are stable. Reflected in these ratings is the level of capitalization at the insurance companies, which has been supported by capital contributions from the parent, favorable performance by the companies' bond portfolios and positive earnings momentum, particularly in the excess/ surplus lines, as well as the 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. and regional operations. In 2001 and 2002 the capital contributions were facilitated by multiple equity offerings of W.R. Berkley stock, where the majority of the proceeds were contributed to the insurance operations and the remainder was held at the holding company for general corporate purposes including debt service. These equity offerings underscore The underscore character (_) is often used to make file, field and variable names more readable when blank spaces are not allowed. For example, NOVEL_1A.DOC, FIRST_NAME and Start_Routine. (character) underscore - _, ASCII 95. W.R. Berkley's ability to access the capital markets. The ratings are further supported by W.R. Berkley's refocused reinsurance and regional operations and re-underwriting initiatives, which included price increases, as well as the elimination of personal lines and alternative market reinsurance, both of which contributed to volatility in earnings. The ratings also consider W.R. Berkley's overall business model that seeks to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. its expertise in specialized businesses, prudent risk management strategy, a somewhat conservative investment portfolio and diversified operations within many segments of the property/casualty industry. Such factors highlight the strategic role each company plays in the Berkley group. Conversely, in recent years, these strengths have been partially offset by W.R. Berkley's modest operating returns and capital generation. Over the past few years, operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before have been negatively impacted by intense competition, a rather high expense structure, weather-related losses (particularly in personal lines) and adverse loss reserve development. In 2001, the latter was highlighted when the company experienced significant loss reserve increases from alternative markets reinsurance and, to a lesser extent, the events of Sept. 11, the Enron bankruptcy and a nursing home book of business. The stable outlooks for Berkley Insurance, Berkley Regional and Admiral and Nautilus recognize their stabilization in capital, earnings momentum, the favorable impact of management's initiatives and improving market conditions. The negative outlook for Carolina Casualty recognizes the inherent risk associated with considerable policy count growth and its history of adverse loss reserve development and mediocre me·di·o·cre adj. Moderate to inferior in quality; ordinary. See Synonyms at average. [French médiocre, from Latin mediocris : medius, middle; see medhyo- operating performance. While W.R. Berkley Corp.'s financial leverage has been historically high and fixed coverage relatively low for its ratings, the recent equity offerings and the aforementioned positive earnings momentum have had a favorable impact on both of these measures. For a list of the financial strength and debt ratings of W.R. Berkley Corp., please visit http://www.ambest.com/press/wrberkley.pdf. 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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