A.M. Best Affirms Rating of Labuan Re.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Sept. 23, 2002 A.M. Best Co. has affirmed the financial strength rating of B++ (Very Good) of Labuan 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. Limited, Malaysia. The current rating reflects Labuan Re's solid capitalization, strong shareholder commitment and increased diversification of risks. Also supporting the rating are its improved investment management and adequate retrocession RETROCESSION, civil law. When the assignee of heritable rights conveys his rights back to the cedent, it is called a retrocession. Erskine, Prin. B. 3, t. 5, n. 1; Dict. do Jur. h.t. protection. The company has a solid capital position as demonstrated by the Best's Capital Adequacy Ratio Capital adequacy ratio (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR)[], is a ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss. (BCAR BCAR Brunswick County Association of Realtors BCAR British Civil Airworthiness Requirements BCAR Bullitt County Animal Rescue (Shepherdsville, KY) BCAR Business Case Analysis Report BCAR Beaver Creek Array BCAR Buffalo Civic Auto Ramps, Inc. ). Net underwriting leverage for 2001 stood at 0.45 times. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Labuan's offshore insurance regulations, the company's solvency margin declined from 1,886.6% in 2000 to 1,528% in 2001. However, given the sizable margin that exists, business growth in the foreseeable future will be well supported. Retrocession protection is also deemed to be adequate. The company's underwriting risk exposure is increasingly well diversified across Southeast Asia Southeast Asia, region of Asia (1990 est. pop. 442,500,000), c.1,740,000 sq mi (4,506,600 sq km), bounded roughly by the Indian subcontinent on the west, China on the north, and the Pacific Ocean on the east. , the Middle East and Africa. In terms of investments, the asset portfolio is prudently allocated into different classes and amongst different fund managers. Since A.M. Best's last evaluation, Labuan Re has implemented measures to improve the monitoring process on its investment performance and risk exposure. Offsetting factors include the company's unprofitable underwriting operations and small market presence. Since the recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. in 1996, underwriting deficits have eroded much of the investment income earned. The combined ratio stood at 148% at the end of 2001. In light of today's financial market conditions, Labuan Re has had to tighten its underwriting control to ensure that its earnings profile will be enhanced over the next few years. The company's competitive position is yet to be established. Its market share in Malaysia is estimated to be approximately 4% on a gross reinsurance premium basis. In the international arena, this figure is much lower. 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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