A.M. Best Affirms Rating of Catlin Insurance Company Limited.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Sept. 9, 2003 A.M. Best Co. has affirmed the financial strength rating of A (Excellent) of Catlin Insurance Company Limited (CICL CICL Central Illinois Collegiate League (baseball) CICL Cast Iron Cement Lined (pipe) CICL cast iron concrete lined (pipe) ), Bermuda. The outlook is stable. The rating reflects the company's excellent capitalisation and prospective financial performance, access to business with a proven track record through Lloyd's Syndicate 2003--currently rated A (Excellent)--and its development of a diversified account from other business sources. An offsetting factor is the challenge to CICL from increased business volume. 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 Catlin Group Ltd (CGL See Carrier Grade Linux. ), a Bermudian holding company. CGL is the ultimate owner of Catlin Underwriting Agencies Limited (CUAL CUAL Catlin Underwriting Agencies Ltd ), Lloyd's managing agency of syndicate 2003. Excellent capitalisation--CICL maintains excellent risk-adjusted capitalisation. At year-end 2002, total shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. was 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. 456 million, including USD 406 million in new funding from CGL's July 2002 private equity offer. A.M. Best believes that CICL's prospective risk-based capitalisation is sufficient to support its existing plans for growth. This includes both growth in Bermuda as well as initiatives currently under consideration to open branches of CICL in other locations. Excellent prospective performance--A.M. Best believes that CICL's performance will be excellent in 2003 and 2004 (subject to normal loss experience) based on the performance of its core business reinsuring syndicate 2003. The company's combined ratio in 2002 was excellent at 65% and met A.M. Best's expectation that CICL's links to CUAL would mitigate the risks normally associated with start up companies because it provided an established source of profitable business. This covers the company's first six months of trading from July 2002 when the account written entirely comprised quota share For This article is about quota shares (shares of the quota). For other usages of quota, see, see . A quota share is a specified number or percentage of the allotment as a whole (quota), that is prescribed to each individual entity (see Non-tariff barriers to trade). 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. of the CUAL syndicates. In 2003, reinsurances of CUAL managed syndicates are expected to account for approximately 78% of estimated gross written premium. Increased business volume--CICL plans to nearly treble gross premium income in 2003 and then increase by a further 100% in 2004 to approximately USD 525 million. A.M. Best believes that these targets are achievable but will nevertheless stretch CGL's management resources at the same time as substantial growth is expected at syndicate 2003. 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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