A.M. Best Affirms Rating of General Insurance Corporation of India.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 A (Excellent) financial strength rating of General Insurance Corporation of India (GIC GIC See: Guaranteed Investment Contract GIC See guaranteed investment contract (GIC). ). The outlook remains stable. The rating reflects the company's excellent risk-adjusted capitalisation, improved 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. performance and leading business position in India's 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. market. A partially offsetting factor is the company's long-term reliance on investment income. A.M. Best believes GIC's prospective risk-adjusted capitalisation is likely to remain excellent and anticipates that it is likely to be sufficient to absorb forecast premium growth of approximately 20% to year-end March 2005. Marginal improvement is anticipated in the company's combined ratio, following a reduction to 99.1% at year-end March 2004, down from 110.6% the previous year. The improvement came largely from the motor account, where A.M. Best believes further progress is likely as a result of the anticipated removal of motor tariffs over the coming two years, beginning with own damage coverage. In addition, A.M. Best anticipates that GIC will most likely retain its leading position within its domestic market despite a likely decline in its reliance on the compulsory cessions from which it benefits as India's national reinsurer re·in·sure tr.v. re·in·sured, re·in·sur·ing, re·in·sures To insure again, especially by transferring all or part of the risk in a contract to a new contract with another insurance company. (currently 20% cession The act of relinquishing one's right. A surrender, relinquishment, or assignment of territory by one state or government to another. The territory of a foreign government gained by the transfer of sovereignty. CESSION, contracts. from domestic insurers). The company's long-term reliance on investment income to attain bottom line profits, together with its high exposure to the domestic investment markets, has a negative impact on the rating. However, A.M. Best anticipates that the company's current focus on underwriting profitability is likely to lead to a continuation of the trend towards reduced reliance on investment income that began at year-end March 2004. For current 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. , independent data and analysis on more than 470 reinsurance companies, please visit http://www.ambest.com/reinsurance/. For current Best's ratings, independent data and analysis on more than 3,000 individual property/casualty companies, groups and industry composites, please visit http://www.ambest.com/pc. 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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