A.M. Best Affirms Rating of La Colonial S.A.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Jan. 13, 2003 A.M. Best Co. has affirmed the financial strength rating of B++ (Very Good) of La Colonial S. A., Compania de Seguros (Dominican Republic Dominican Republic (dəmĭn`ĭkən), republic (2005 est. pop. 8,950,000), 18,700 sq mi (48,442 sq km), West Indies, on the eastern two thirds of the island of Hispaniola. The capital and largest city is Santo Domingo. ) and assigned the rating a stable outlook. The rating reflects the company's strong capitalization, favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. earning trends and conservative operating strategies. The rating also considers La Colonial's strong 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. protection, experienced management team and successful distribution strategy as it maintains its competitive market position. La Colonial has maintained revenue growth and achieved a strong capital and solvency position through the careful selection of risk, with a focus on profitability over volume. Over the past five years, 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. and operating results have been favorable due to effective underwriting, a comprehensive reinsurance program and its conservative operating philosophy. Offsetting these strengths are the local market's limited size and growth potential, the volatility in the region where the company operates and the potential exposure to catastrophic events. Moreover, La Colonial's investment portfolio lacks diversification since it is constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. by the country's investment regulations. In addition, the company will be challenged in coming years by rising reinsurance costs attributed to a hardening hardening, in metallurgy, treatment of metals to increase their resistance to penetration. A metal is harder when it has small grains, which result when the metal is cooled rapidly. reinsurance market. 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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