A.M. Best Affirms Rating of Crown Insurance Corporation Limited.OLDWICK, N.J. -- 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) of Crown Insurance Corporation Limited (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 outlook is stable. The rating reflects Crown's consistent satisfactory operating performance, good liquidity and solid distribution capabilities supported by its close and long-term relationship with local car dealers and finance companies. 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. (BCAR BCAR Brunswick County Association of Realtors BCAR British Civil Airworthiness Requirements BCAR Bullitt County Animal Rescue (Shepherdsville, KY) BCAR Business Case Analysis Report BCAR Beaver Creek Array BCAR Buffalo Civic Auto Ramps, Inc. ), which measures capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. on a risk-adjusted basis, also demonstrates the company's strong capital position. Crown was able to maintain a steady growth in 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. results during fiscal year 2003. The loss ratios of the company have been low and stable with a five-year average of 19.2% between fiscal years 1999 and 2003. Crown's conservative investment strategy of investing 91% of its total portfolio in cash and short-term deposits with financially strong banks further enables it to generate stable investment returns with limited uncertainty. These positive factors are partially offset by the weak diversification of product lines, as well as the intense rivalry from new entrants into the market. In light of heavy concentration of business in credit contract insurance, Crown's underwriting performance is vulnerable, subject to the country's economy and consumer confidence. The intense rivalry from new entrants into the market place will pose an ongoing challenge to Crown in terms of the profitability of the company. 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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