A.M. Best Affirms Rating of Top Layer Reinsurance Ltd.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--April 2, 2004 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+ (Superior) of Top Layer 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. Ltd. (Bermuda). The rating outlook is stable. The rating reflects the substantial amount of support the company receives from its co-owners, State Farm Mutual Automobile Insurance Company (State Farm) (currently rated A++ (Superior)) and Renaissance Reinsurance Ltd. (RenaissanceRe) (currently rated A+ (Superior)). Additionally, since the company's inception in 1999, it has generated outstanding operating results, which is due to the property catastrophe Catastrophe, from the Greek Καταστροφή (katastrephein), literally means "to turn" (strephein) "downwards" (kata-). 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. expertise of RenaissanceRe, combined with the lack of catastrophes significant enough to impact the programs written in the company's core markets. Top Layer's business scope is limited to the assumption of high excess layers of non-U.S. property catastrophe risks underwritten on a global basis. An offsetting factor is that on a stand-alone basis, Top Layer is only modestly capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. relative to the high excess layers of property catastrophe risks it assumes. However, through various contractual obligations of the co-owners, the company receives substantial capital support and reinsurance protections from State Farm and, to a much lesser degree, RenaissanceRe. Top Layer is structured so that its maximum full limit net loss during any calendar year is capped at $100 million. Losses can trigger mandatory or discretionary capital calls for State Farm and RenaissanceRe to replenish re·plen·ish v. re·plen·ished, re·plen·ish·ing, re·plen·ish·es v.tr. 1. To fill or make complete again; add a new stock or supply to: replenish the larder. 2. Top Layer's capital. Additionally, State Farm provides Top Layer with $3.9 billion excess of $100 million stop-loss stop-loss, n a general term referring to that category of coverage that provides insurance protection (reinsurance) to an employer for a self-funded plan. reinsurance protection. This cover is significantly larger than the aggregate exposures the company undertakes in the geographic zones where it assumes risks. A.M. Best acknowledges that Top Layer's rating is fully dependent upon the support that it receives from State Farm and RenaissanceRe. A.M. Best monitors these companies on an ongoing basis and continues to assess how any developments within these companies may impact Top Layer's rating. For current 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. , independent data and analysis on more than 470 reinsurance companies, please visit http://www3.ambest.com/reinsurance/. 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. |
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion