A.M. Best Affirms Rating of Ecclesiastical Insurance Office plc.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Dec. 16, 2002 A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) of Ecclesiastical Insurance  This article or section is written like an .Please help [ rewrite this article] from a neutral point of view. Mark blatant advertising for , using . Office plc (EIO (Enhanced I/O) A hardware interface for HP printers that is used for adding an internal print server and network adapter, a hard disk and other plug-in functionality. EIO cards are smaller than previous MIO cards and more energy efficient. They use the PCI bus. See MIO. ). The outlook is stable. The affirmation reflects the company's excellent capitalisation, strong market profile in its core activities and improving underwriting performance. Offsetting these factors are potential volatility in results due to the company's high exposure to equities and its limited financial flexibility, which arises from its status as an unquoted subsidiary of a charitable company. Strong capitalisation--The company continues to maintain capital at a level supportive of its A- rating, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. A.M. Best's risk-based capital model. A.M. Best's projections of year-end 2002 capital take into account the likely unrealised investment losses impacting shareholders' funds. Strong franchise--A.M. Best believes EIO benefits from a strong franchise, which helps it to maintain high client retention levels in its core portfolios. EIO provides a high proportion of the insurance cover purchased by the Anglican church in the United Kingdom and also enjoys high market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" in other specialist sectors such as independent schools, charitable institutions and care homes for the elderly. Total non-life gross premium income grew by 12% to GBP GBP In currencies, this is the abbreviation for the British Pound. 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. 282 million (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. 448 million). Improving underwriting performance--A revised, more rigorous underwriting strategy together with generally improved market conditions have resulted in an improving trend in EIO's underwriting performance. A.M. Best expects the technical account to at least reach breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations by year-end before equalisation Noun 1. equalisation - the act of making equal or uniform equalization, leveling human action, human activity, act, deed - something that people do or cause to happen provisions and investment income. Further improvement is expected in 2003 as the stricter underwriting discipline continues to feed through to a better incurred loss experience and the company benefits from continuation of the hard market. In 2001 the combined ratio was 106%, down from 112% in 2000. High exposure to equities--Earnings remain exposed to the potential for volatility, despite a policy of gradually reducing exposure to equities, which formed 47% of invested assets at year-end 2001. In recent years, overall performance has been heavily reliant on capital gains from the stock market. Limited financial flexibility--As an unquoted company, EIO's financial flexibility is somewhat limited, although it has issued preference shares quoted on the London Stock Exchange London Stock Exchange London marketplace for securities. It was formed in 1773 by a group of stockbrokers who had been doing business informally in local coffeehouses. . The company's strategy is to support future growth through retained profits whilst maintaining its excellent level of risk-adjusted capital. Zero debt leverage gives some scope for flexibility should unforeseen needs arise. Expectation: -- A.M. Best anticipates that year-end 2002 capital adequacy will be at least maintained in 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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