A.M. Best Affirms Rating of Gerling-Konzern Allgemeine Versicherungs AG.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Jan. 6, 2003 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 Gerling-Konzern Allgemeine Versicherungs AG (GKA GKA Goroka, Papua New Guinea - Goroka (Airport Code) GKA Global Key Account ) and its core subsidiaries, Gerling Gerling are an alternative guitar and electronic act from Australia. They formed in 1993, and are based in Sydney. History The band formed in 1993 with the line-up of Darren Cross (guitar, vocals), Presser (real name Paul Towner, drums) and Brad Herdson (guitar, vocals). Canada Insurance Company and Gerling America Insurance Company. The rating action reflects GKA's excellent business position in industrial insurance, excellent capitalisation n. 1. same as capitalization. Noun 1. capitalisation - writing in capital letters capitalization writing - letters or symbols that are written or imprinted on a surface to represent the sounds or words of a language; "he turned the paper and improving operating performance. Offsetting factors are GKA's limited financial flexibility and the inherent volatility its industrial portfolio. The affirmation A solemn and formal declaration of the truth of a statement, such as an Affidavit or the actual or prospective testimony of a witness or a party that takes the place of an oath. An affirmation is also used when a person cannot take an oath because of religious convictions. of the ratings of Gerling America Insurance Company and Gerling Canada Insurance Co. reflects their status as core subsidiaries of GKA. The outlook is stable. Excellent business position - GKA is one of the leading industrial insurers benefiting from its strong risk management and service capabilities. A.M. Best believes that GKA is well positioned to take advantage of a shortage of capacity in this specialist segment and expects that GKA will continue its profit-oriented growth strategy. As a result, A.M. Best expects a moderate premium growth of approximately 3% to EUR EUR In currencies, this is the abbreviation for the Euro. 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. 3.1 billion (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. 3.2 billion) in 2002. Excellent capitalisation - GKA's prospective risk-adjusted capitalisation is excellent based on A.M. Best's capital model. A.M. Best does not anticipate additional capital needs in the next two years based on GKA's business plans, and it expects a further strengthening of the company's equity base from retained profits in 2002 and 2003. Improving operating performance - Increased premium rates averaging 15% and a comprehensive review of GKA's book of business will lead to higher profits in 2002. A.M. Best expects a combined ratio of approximately 104% in 2002. However, 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. results will be partially offset by lower investment income due to weak equity markets. The recently announced further cost-cutting measures for the entire Gerling Group should gradually reduce GKA's high expense levels. Limited financial flexibility - A.M. Best believes that GKA's financial flexibility is limited as long as uncertainties regarding the future ownership remain. However, GKA's financial leverage is expected to be at a low 11% at year-end 2002. Inherent volatility of industrial risks - GKA's book of business comprises mainly more volatile industrial risks, although it has a very strong risk management approach aiming to limit its exposure. GKA is seeking to further diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. into commercial and personal lines. Expectations: -- A.M. Best will closely monitor GKA's ability to achieve a combined ratio of below 100% in 2003. -- The continued uncertainties regarding the future ownership of the Gerling Group are not expected to have a negative impact on GKA's business profile. -- A.M. Best does not expect any significant increase in GKA's net retention as a result of the withdrawal of the reinsurance protection from Gerling Re. 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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