A.M. Best Affirms Rating of Jupiter Insurance Ltd.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+ (Superior) of Jupiter Insurance Ltd. (Jupiter) (Guernsey). The rating outlook remains stable. The rating reflects the company's superior risk-adjusted capitalisation and operating performance. A partially offsetting factor is the company's high dependence on one large contract. Jupiter is a single parent captive of BP plc, which is an integrated oil and gas company. A.M. Best believes that Jupiter's prospective risk-adjusted capitalisation is likely to remain superior. At year-end 2004, an anticipated 50% increase in retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. is likely to further strengthen capitalisation. In addition, the company's practice of not using 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. leads to a low level of credit risk exposure. The concentration risk, arising from the fact that most of investments are placed within the group, has been factored into the rating. A continuation of the company's superior operating performance is likely in 2005 with stable technical profitability of over 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. 160 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. 311 million) combining with excellent investment income of approximately GBP 90 million (USD 175 million), derived from Jupiter's investment in a discount note held with BP International Ltd. An adjustment in the period of the main insurance contract the company writes is likely to result in a 20% increase in earned premiums Earned premium is the portion of an insurance written premium which is considered "earned" by the insurer, based on the part of the policy period that the insurance has been in effect, and during which the insurer has been exposed to loss. in 2004 and a four percentage point improvement in the company's combined ratio to approximately 20%. The company is highly dependent on this single contract, which is expected to account for approximately 60% of gross premium in 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. and independent data on the captive and alternative insurance market, please visit http://www.ambest.com/captive/. 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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