A.M. Best Affirms Rating of London Life and General Reinsurance Company Ltd.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Nov. 21, 2002 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 London Life and General 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. Company Ltd (LLGRC). The rating reflects the company's strategic importance to London Reinsurance Group Inc. (LRG LRG Large LRG Liquefied Refinery Gases LRG Local and Regional Governments LRG Long Range Aircraft LRG Looking Real Good LRG Location Reference Group LRG Local Reference Group LRG Library Resource Guide (Information Today, Inc) ), in addition to its excellent capitalisation n. 1. same as capitalization. Noun 1. capitalisation - writing in capital letters capitalization writing - letters or symbols that are written or imprinted on a surface to represent the sounds or words of a language; "he turned the paper , improving prospective financial performance and conservative investment strategy. An offsetting factor is LLGRC's weak 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 in 2001. The rating outlook is stable. Excellent capitalization-- In A.M. Best's opinion, LLGRC is strategically important to LRG as its only operation in Europe. The company had excellent capitalisation at year-end 2001, 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. A.M. Best's risk-adjusted capital model. LLGRC's financial flexibility is enhanced by financial support from its immediate parent, LRG, and its ultimate parent, Great West Life--rated A++ (Superior). This was illustrated by the CAD 25 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. 15.9 million) capital contribution in 2001 from LRG to support LLGRC following the World Trade Center disaster. In addition, LLGRC receives support in the form of a quota share For This article is about quota shares (shares of the quota). For other usages of quota, see, see . A quota share is a specified number or percentage of the allotment as a whole (quota), that is prescribed to each individual entity (see Non-tariff barriers to trade). of its aggregate stop loss business from another LRG subsidiary, London Life and Casualty Reinsurance Corporation--rated A (Excellent). Excellent prospective financial performance-- A.M. Best expects LLGRC's pre-tax operating performance to continue to improve, returning to profitability in 2002, as the company concentrates on its core business lines, property and casualty (both finite and traditional) and life. The company's operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. ratio has varied significantly (between 2% and 68% over the last five years) due to the nature of the life finite deals written that require LLGRC to establish substantial deferred acquisition costs. A.M. Best expects LLGRC's expense ratio to stabilise at approximately 5% in 2003 and, together with a loss ratio in the region of 90%, a combined ratio of less than 100% is anticipated. This follows poor performance in the period since 1999, culminating in a net loss before taxation of CAD 17.8 million (USD 11.4 million) in 2001. The World Trade Center disaster had a net impact on the 2001 underwriting result before taxation of CAD 19 million (USD 12.2 million). Conservative investment strategy-- A.M. Best expects the company's conservative investment allocation to lead to improvements in investment performance in 2003. Investments are split 87% investment grade fixed income securities, 11% cash and short-term deposits and 2% non-investment grade securities. Expectations: - Capital will be maintained at a level commensurate with the company's current rating. - A stronger underwriting performance will be achieved as LLGRC concentrates on the property and casualty and life portfolios. In addition, A.M. Best has affirmed the financial strength rating of A (Excellent) of London Life Reinsurance Company (Blue Bell, PA) and London Life & Casualty Reinsurance Corp. (Barbados). 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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