A.M. Best Affirms Rating of New Castle Reinsurance Company Ltd. and Assigns Rating to New Castle Reinsurance Holdings Ltd.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) of A- (Excellent) and the issuer credit rating (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of "a-" of New Castle 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. (New Castle Re) (Bermuda). Concurrently, A.M. Best has assigned an ICR of "bbb-" to New Castle Reinsurance Holdings Ltd. (Bermuda). The outlook for all ratings is stable. The rating affirmations reflect New Castle Re's solid capitalization, continued enhancement of its infrastructure, in particular its risk and contract recording systems, as well as the execution of its business plans that were presented to A.M. Best during the initial rating process last year. In addition to meeting A.M. Best's previously established requirements for new company formations, the initial rating assignment of New Castle Re also reflects its ability to meet A.M. Best's stricter risk-based capital requirements Risk-Based Capital Requirement A stated requirement of liquid reserves placed upon banks and institutions that deal in risky ventures. Notes: These requirements exist for the protection of investors who hold an interest in these types of businesses. for property catastrophe companies. These more stringent requirements require a more conservative level of risk-based capital to support a company's assigned rating. Additionally, New Castle Re's risk-based capital is further enhanced by a financial guaranty As a verb, to agree to be responsible for the payment of another's debt or the performance of another's duty, liability, or obligation if that person does not perform as he or she is legally obligated to do; to assume the responsibility of a guarantor; to warrant. provided by its sponsor, the Citadel Investment Group Citadel Investment Group is a $13.4 billion [1] hedge fund based in Chicago, Illinois, founded by billionaire trader Kenneth C. Griffin. It is one of the world's largest hedge funds. , which is one of the largest hedge funds hedge fund, in finance, a highly speculative, largely unregulated investment device. Originating in the 1950s, the funds "hedge" by offsetting "short" positions (borrowing a security and then selling it at a higher price before repaying the lender) against "long" in its industry. As part of the new company formation monitoring process, management has kept A.M. Best fully apprised of New Castle Re's progress. Overall, New Castle Re has adhered to its initial business plan with first year premium volume in line with expectations and risk-based capital fully supportive of its current rating level. Moreover, management and staff have been further strengthened with the addition of experienced personnel. In addition to being susceptible to low frequency, high severity events, A.M. Best anticipates that New Castle Re will continue to be challenged by increased competition from established companies, sidecars and potential new start-ups seeking to enter the industry. The additional capacity brought to the market could dampen expected returns Expected Return The average of a probability distribution of possible returns, calculated by using the following formula: if pricing of reinsurance coverage fails to meet anticipated levels. Furthermore, the ability of New Castle Re to effectively build and retain market acceptance will only be proven over time. For Best's Ratings, 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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