A.M. Best Affirms Rating of China International Reinsurance Company Limited; Assigns Issuer Credit Rating.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and assigned an issuer credit rating of "a-" to China International 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. Company Limited (CIRe) (Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. ). The outlook is positive. The rating reflects CIRe's consistently strong operating performance, steady growth of capitalization through retention of earnings, prudent investment policy and outstanding market presence in the Hong Kong and Macau insurance markets. CIRe has persistently generated 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. earnings for the company over the last five years. Notwithstanding the outbreak of SARS in 2003, CIRe was able to maintain its net loss ratio at a level of 71.3%. Given its stable cost structure, CIRe's combined ratio in 2003 was still kept at a level below 100%. Additionally, the Indonesian earthquake and subsequent tsunami that occurred in December 2004 is expected to have a limited impact on CIRe's overall operating results due to its prudent retrocession RETROCESSION, civil law. When the assignee of heritable rights conveys his rights back to the cedent, it is called a retrocession. Erskine, Prin. B. 3, t. 5, n. 1; Dict. do Jur. h.t. arrangement. The 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. , which measures capitalization on a risk-adjusted basis, demonstrates that CIRe is strongly capitalized. Consistent growth in internal surplus has greatly strengthened the company's capitalization over the last five years. CIRe's capital and surplus grew by approximately 20% in 2003. High retention of earnings, along with the stringent top-line growth approach, improved the net premium leverage to 0.78 times in 2003 from 0.92 times in 2002. CIRe maintains strong liquidity within its investment portfolio. As of fiscal year-end Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. 2003, cash and fixed income securities represented 72% of CIRe's total assets. The investment portfolio contributed positively to the company's profitability over the past five years. Offsetting factors include CIRe's worldwide risk exposures, small capacity relative to international reinsurers and CIRe's parent company's capital commitment to support the rapid expansion of its sister companies, Tai Ping Life and Tai Ping Insurance, in China. China International Insurance Holdings (CIIH CIIH China Insurance International Holdings Company Limited (stock symbol) ), the immediate holding company of CIRe, commits to providing capital support for the business expansion of Tai Ping Life and Tai Ping Insurance. In light of the uncertainties arising from the dynamic changes in the China insurance markets, CIIH however, could be challenged by various risks resulting from managing the rapid business growth in China. A.M. Best will closely monitor the development in the group business and the capital position. 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 http://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 http://www.ambest.com. |
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