A.M. Best Affirms Rating of MERITZ Fire & Marine Insurance Company, 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 B++ (Very Good) and assigned an issuer credit rating of "bbb+" to MERITZ Fire & Marine Insurance Company, Ltd. (MERITZ) (South Korea). The outlook on both ratings is stable. The ratings reflect MERITZ's moderate risk-adjusted capitalization, stable 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 investment strategy. MERITZ's capitalization has been strengthened during the past five years. The company has maintained a Korean solvency ratio Solvency Ratio One of many ratios used to gauge a company's ability to meet long-term obligations. Notes: Derived by taking a company's net worth and dividing by total assets. See also: Asset, Asset Valuation, Balance Sheet, Fundamental Analysis, Income Statement of 179% as of fiscal year 2004. The Best 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. ), which measures capitalization on a risk-adjusted basis, also indicates the company's moderate capital position. During the past five years, MERITZ has shown consistent operating performance which is in line with other major non-life companies in Korea. Its combined ratio has been maintained at a stable level, with a 5-year average of 105%. The company maintains an investment portfolio with bonds accounting for approximately 47% of total assets as of fiscal year 2004. A conservative investment strategy will continue to contribute to the company's financial stability. Partially offsetting these positive attributes are the company's relatively high insurance leverage and the continuing low interest rate environment and intensified in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: competition in the Korean non-life insurance market. MERITZ's insurance leverage, excluding pure savings premium with a capital charge of 4% on the savings reserve, stood at 2.82 times, indicating a relatively high ratio among the major non-life players as of fiscal year 2004. The low interest rate environment in Korea will continue to exert pressure on the company's investment yield as well as the interest margin of its long-term product portfolio. MERITZ is shifting its business portfolio towards floating rate products to mitigate the problem of low interest rates. A.M. Best anticipates that the increasing competition in motor insurance from market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" through direct channels will exert pressure on the company's profitability in the near future. 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. 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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