A.M. Best Affirms Rating of ACE Insurance Limited (New Zealand).OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A (Excellent) of ACE Insurance Limited (ACENZ ACENZ Association of Colleges of Education in New Zealand ACENZ Association of Consulting Engineers New Zealand, Inc. ACENZ A Cleaner Environment New Zealand Limited (Manukau City, New Zealand) ) (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 outlook is stable. The rating reflects ACENZ's operating profitability, good underwriting performance and moderate risk-adjusted capitalization. A.M. Best believes that ACENZ's underwriting discipline and relatively conservative investment strategy will contribute to the company's financial stability. The rating also considers the comprehensive 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. support from the ACE group and its related entities. ACE's New Zealand operation generated net income after tax of NZD NZD In currencies, this is the abbreviation for the New Zealand Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 22.2 million (USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 15.9 million) in 2004, an increase of 32%. This was due primarily to an exceptionally low claims year. As a result, the loss ratio was 8.1% in 2004, compared to 34.3% in 2003. Despite the strong operating result, ACENZ's risk-adjusted capitalization as measured by 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. , improved moderately in 2004. This was due predominantly to a dividend payout of 102.1% during the year. ACENZ had a liquid and relatively conservative investment portfolio in 2004, with 10% of assets invested in cash and 55% invested in government or other fixed interest securities. Investment yield for the year was 5.4%, slightly lower than the five-year average yield of 6.5%. Partially offsetting these positive factors is ACENZ's exposure to catastrophic perils, softening premium rates and intense market competition. The New Zealand general insurance industry is highly concentrated, with the top five insurers generating over 80% of total market premiums. Existing capacity in the market has led to softening premium rates. ACENZ will face increasing challenges in maintaining its recent strong performance. As with other general insurers in New Zealand, ACENZ is exposed to catastrophic perils such as flooding. However, the company is reasonably well protected by its reinsurance programs. For Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , 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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