A.M. Best Affirms Rating of Hannover Life Reassurance - UK - Limited.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--April 7, 2004 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 Hannover Life Reassurance (UK) Limited (HLRUK). The outlook is stable. The rating reflects HLRUK's strategic importance to its parent, Hannover Re Hannover Re (FWB: HNRGn), in German Hannover Rückversicherung AG, with gross premium of around €9 billion in 2006, is one of the five largest reinsurance groups in the world. Its headquarters are in Hanover, Germany. , its strengthened capitalisation, good business profile and very good and improving operating performance. Good business profile--HLRUK's strong premium growth is expected to continue in 2004, reflecting the nature of the life 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. business and the acquisition of four new client treaties in 2003. This will continue the trend shown in 2003, when premiums grew by an above market average rate (28% at year-end 2003) due to the substantial increase of the single premium business (48% year-on-year). Despite the strong business growth, HLRUK remains a medium-sized player in a sector (reinsurance of protection products) dominated by large U.K.-established companies. A.M. Best does not anticipate a change in the company's underlying business profile in the medium term. Improving operating performance--The company's financial performance has strengthened during the last year with Earnings Before Interest and Tax (EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). ) reaching 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. 4.27 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. 6.85 million). Prospectively, A.M. Best is concerned that the large proportion of annuities (78% of total mathematical reserves) and the existence of guaranteed premium critical illness business might be negatively affected by improved mortality experience and pricing uncertainties. Strengthened risk-adjusted capitalisation--HLRUK's risk-adjusted capitalisation is expected to remain stable in 2004, as retained profits are estimated to counterbalance the effect of the increase in reinsurance recoverables experienced in 2003. The company's position was enhanced during the last year due to the capital injections from Hannover Re and the increased utilisation of internal reinsurance and co-insurance. 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://www3.ambest.com/reinsurance/. 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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