A.M. Best Affirms Rating of La Colonial.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 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. ). The rating outlook is stable. The rating reflects the company's profitable operating results, favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. 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 conservative operating philosophy. The rating also considers La Colonial's experienced management team, successful distribution strategy as it strengthens its market position and comprehensive 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. La Colonial is a multi-line insurance provider based in the Dominican Republic. The company provides coverage in property, fire and allied, motor, life and accident and health lines of business. The property segment specializes in commercial lines and is also the leader in mortgage insurance. Collective life and creditor life insurance make up the majority of La Colonial's life insurance portfolio. La Colonial has maintained consistent revenue growth through the careful selection of risk with a focus on operating profitability. Over the last five years, operating results have been favorable due to effective underwriting controls, conservative operating strategies and a prudent reinsurance program. Recent growth in premium volume has resulted in an increase in underwriting exposure and deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. of La Colonial's leverage position and capitalization. However, a recent capital infusion Capital infusion Often refers to the cross-subsidization of divisions within a firm. When one division is not doing well, it might benefit from an infusion of new funds from the more successful divisions. and positive earnings have improved its capital position, which fully supports the current premium volume. These positive factors are partially offset by La Colonial's exposure to a catastrophe-prone zone and weather-related catastrophic events. The frequency of weather-related catastrophic activities has been increasing in recent years, resulting in increased risk exposure to such events. Recent economic volatility in the Dominican Republic along with constraints imposed by the country's investment regulations will also challenge La Colonial to sustain its profitability. For 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. , an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. For current Best's Ratings, independent data and analysis on more than 3,000 individual property/casualty companies and A.M. Best groups, please visit 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 www.ambest.com. |
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