A.M. Best Affirms Rating of Afianzadora Insurgentes S.A.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Dec. 10, 2001 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 financial strength rating of A- (Excellent) for Afianzadora Insurgentes S.A. (AISA AISA Afghanistan Investment Support Agency AISA Africa Institute of South Africa AISA Association of International Schools in Africa (Nairobi, Kenya) AISA American Indian Student Association AISA Alabama Independent School Association ) Mexico, D.F., and assigned it a stable outlook. The company is a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of The St. Paul St. Paul as a missionary he fearlessly confronts the “perils of waters, of robbers, in the city, in the wilderness.” [N.T.: II Cor. 11:26] See : Bravery Co. The rating recognizes the support from AISA's parent for all 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 written surety business. Furthermore, the rating reflects the integrated operations of AISA and St. Paul, the latter offering automatic reinsurance in terms of underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. capacity and capabilities. St. Paul, one of the world's largest surety writers, supports AISA as an important entity for its international presence. The rating reflects the company's strong balance sheet and solid capitalization, which is favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted from the quicker write-down of uncollectable claims. AISA is the largest surety company in Mexico with a 40% market share. The Mexican surety market is highly concentrated with five companies writing about 87% of all premiums. Recent regulation changes on the criteria for revenue recognition and required capital benefit AISA's prospective revenue growth and is likely to favorably impact their already dominate market presence. The company benefits from its superior distribution network and branding. In spite of the overall volatility of the local market, operating results in 2001 improved significantly versus the prior year's levels. AISA continues to tighten its risk selection and concentrates on the capacity provided by St. Paul, which brings added value Added value in financial analysis of shares is to be distinguished from value added. Used as a measure of shareholder value, calculated using the formula:
A.M. Best believes AISA's business plan projects reasonable business volume and adequate capital to support operations over the short- to medium-term. Profitability should return to levels prior to those of 2000. Offsetting the positive factors is the uncertainty of the local market's growth potential as well as its volatility. While Mexico has recently shown an economic improvement, there are still concerns of a downturn. This is in addition to the business's dependence on the construction sector, compounding the consistency of revenues, which is particularly exposed to market cycles and reliance on large accounts. 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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