A.M. Best Affirms Rating of Catlin Insurance Company Ltd.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--April 7, 2004 A.M. Best Co. has affirmed the financial strength rating of A (Excellent) of Catlin Insurance Company Ltd. (CICL CICL Central Illinois Collegiate League (baseball) CICL Cast Iron Cement Lined (pipe) CICL cast iron concrete lined (pipe) ) (Bermuda). The outlook remains stable. The rating reflects the company's strong capitalisation and profitable expected performance. An offsetting factor is CICL's expected rapid growth in 2004. 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 Limited (CGL See Carrier Grade Linux. ), a Bermudian holding company. CGL is the ultimate owner of Catlin 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. Agencies Limited (CUAL CUAL Catlin Underwriting Agencies Ltd ), Lloyd's managing agency of Lloyd's Syndicate 2003. Strong capitalisation--A.M. Best expects CICL's risk-adjusted capitalisation to remain strong at year-end 2004, supported by additional capital of approximately 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. 182 million from CGL's initial public offering completed in April 2004 and strong retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. for the year. CICL is expected to continue to generate additional capital internally to support its underwriting without recourse A phrase used by an endorser (a signer other than the original maker) of a negotiable instrument (for example, a check or promissory note) to mean that if payment of the instrument is refused, the endorser will not be responsible. to external sources in the immediate future. Profitable expected performance--In 2004, A.M. Best expects CICL to continue its early record of low reported combined ratios, subject to normal loss experience. Although it is more difficult to forecast CICL's loss ratio because of new accounts that will be written, A.M. Best believes that a loss ratio of less than 65% is achievable in 2004 (compared with a loss ratio of 57% in 2003). A.M. Best believes the company's expense ratio will remain low in 2004 at under 17.5% (up from 10% in 2003), as resources are gradually built up to support increased business volumes. Rapid growth--A.M. Best expects CICL's gross premium written to increase by over 150% in 2004 to over USD 650 million. This will include two new accounts that have not previously been written within CGL. These are an account of professional indemnity, directors and officers liability, general liability and financial institution business written by CICL's U.K. branch (13% of 2004 expected gross written premium) and a structured risk account written in Bermuda (8%). The ultimate performance of these accounts is less predictable than CICL's core business reinsuring or writing business in conjunction with the CUAL syndicates. The rapid growth will also inevitably challenge CICL's management resources. 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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