A.M. Best Affirms Financial Strength and Assigns Issuer Credit Ratings to Tower Group and Tower Group, Inc.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength ratings (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) of A- (Excellent) and assigned issuer credit ratings (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of "a-" to Tower Insurance Company of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of (TICNY TICNY Tower Insurance Company of New York ) and Tower National Insurance Company (TNIC TNIC TOE (TCP Offload Engine) Network Interface Card TNIC Telex Network Identification Code (ITU-T) TNIC Theater Network Integration Center TNIC Toe Network Interface Card ) collectively referred to as Tower Group Companies (Tower). Concurrently, A.M. Best has assigned an ICR of "bbb-" to Tower Group, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : TWGP) (New York, NY). All rating outlooks are stable. The financial strength rating of Tower reflects the group's strong capitalization, consistently profitable underwriting results and demonstrated expertise in servicing a broad product offering to desired markets. Tower's financial flexibility is currently strong due to its access to the capital markets and TWGP'S modest financial leverage and strong interest coverage measures. After successfully completing its initial public offering in 2004, TWGP infused a significant amount of capital into the insurance operations of Tower. This enabled Tower to greatly reduce its dependence on 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 write business previously placed by an affiliated managing general agent and written by third party issuing carriers. These positive ratings factors are somewhat offset by the group's aggressive growth on a direct and net basis, heavy geographic concentration in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. and adverse loss reserve development on an accident year basis. Since 2002, Tower has experienced minimal adverse development reflecting the group's hiring of key actuarial staff and more conservatively establishing current accident year loss estimates. Although A.M. Best is concerned that Tower's growth initiatives could place a strain on its operations and capital base, these concerns are somewhat mitigated due to the group's historically strong underwriting results. Due to the group's concentration in New York City, Tower's capital position is highly exposed to both natural and man-made catastrophe losses. A.M. Best has stress-tested Tower's capitalization on a risk-adjusted basis. The group's capitalization withstood these stress-tests at current rating levels; however, A.M. Best will continue to monitor Tower's risk management and data aggregation practices due to the sensitivity of the group's capital base to catastrophe exposures. For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. 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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