A.M. Best Affirms Munich Re Group's Ratings; Assigns Initial Debt Ratings to American Re.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Dec. 20, 2000 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 Munchener Ruckversicherungs-Gesellschaft (Munich 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 its core reinsurance subsidiaries, including American Re-Insurance Company and its affiliates. The A+(Superior) financial strength rating of Munich American Reassurance REASSURANCE. When an insurer is desirous of lessening his liability, he may procure some other insurer to insure him from loss, for the insurance he has made this is called reassurance. Company (MARC) is under review with positive implications pending the closing of the purchase of CNA's life reinsurance operations. Further, A.M. Best has affirmed the "aaa" senior debt rating of Munich Re Munich Re AG, in German Münchener Rück AG (ISIN: DE0008430026), is the world's second largest reinsurance company with over 5,000 customers in 160 countries and has its headquarters in Munich, Germany. and has assigned an initial "aa" senior debt rating to American Re Corporation and an "aa-" rating to the trust preferred securities issued by American Re Capital I. A.M. Best's highest rating designation for the group reflects Munich Re's preeminent pre·em·i·nent or pre-em·i·nent adj. Superior to or notable above all others; outstanding. See Synonyms at dominant, noted. [Middle English, from Latin prae market profile, outstanding geographic and business diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. , superior capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. and minimal financial leverage. The group's franchise and scope of operations allow Munich Re to sustain its international leadership position with reinsurance relationships in over 150 countries. The group has an evenly distributed book of reinsurance and primary business. The primary insurance business, which is heavily weighted towards the more profitable life/health sectors, particularly ERGO, provides the group with earnings stability which mitigates the volatile results of the reinsurance operations. The company's superior capital strength is supported by its conservative reserve levels, historical earnings strength, conservative financial leverage, as well as significant hidden value in real estate assets and equity positions in Allianz and other German and international blue chip stocks Blue chip stocks Common stock of well-known companies with a history of growth and dividend payments. . The group's exceptional financial flexibility is enhanced by modest operating and financial leverage--debt to capital ratio on a consolidated basis is below 10%--and excellent fixed charge coverage. American Re's ratings reflect its excellent capitalization, dominant position and reputation in the US reinsurance marketplace and historically strong operating performance despite recent sub-par earnings. Further, the ratings reflect American Re's strategic importance to the Munich Re Group, serving as the group's non-life North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. platform. A.M. Best believes American Re adds considerable portfolio advantage to Munich Re in terms of product and geographic diversification. In return, Munich Re holds considerable financial capacity for American Re. Overall capitalization at American Re is well managed and is supported by a conservative reserve position, careful management of its diverse risks and a high quality investment portfolio. The company has sufficient resources to adequately cover its debt servicing requirements, despite its recent weak operating performance. Continued emergence of unfavorable reserve development trends in the industry, has affected recent profitability. For the complete report, listing of companies and debt issues go to: http://isg2001/news/munichre.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. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion