A.M. Best Affirms Rating of Trust International Insurance Company E.C.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--July 29, 2003 A.M. Best Co. has affirmed the financial strength rating of B+ (Very Good) of Trust International Insurance Company E.C. (TIIC TIIC The Idiots In Charge TIIC Those Idiots In Control ), a Bahrain-based reinsurer re·in·sure tr.v. re·in·sured, re·in·sur·ing, re·in·sures To insure again, especially by transferring all or part of the risk in a contract to a new contract with another insurance company. . The outlook remains stable. The rating reflects the company's improving financial performance, good business position and superior risk-based capitalisation. An offsetting factor is the company's high reliance upon 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. cover. Improving financial performance--The company's financial performance significantly improved in 2002 after reporting an operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of 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. 3.3 million (TIIC experienced a loss of USD 2.2 million in 2001) based on a combined ratio of 104.9%, its lowest for five years. A.M. Best believes the company is likely to continue returning operating profits through 2004 with a continued improvement in the combined ratio to less than 100% by 2004, as TIIC benefits from its selective approach to 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. . The company only accepted 20% of the risks it was offered in 2002. Good business position--A.M. Best believes TIIC has maintained its good business position in the key Arab and Afro-Asian markets in which it operates. The company is a leader in onshore and offshore energy business in the Middle East and Far East with a significant proportion (87%) of the company's 2002 gross premium income of USD 57 million emanating from these regions. TIIC is expected to enhance its business position by maintaining its existing relationships whilst also developing its presence in regions such as Malaysia. Superior capitalisation--On a risk-adjusted basis, TIIC had superior capitalisation at year-end 2002, 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. the A.M. Best risk-adjusted capital model, largely a result of its relatively small net retained account (net premium written of USD 6.4 million in 2002). On an absolute basis, the company remains relatively small with shareholders' funds of USD 78.9 million in 2002, an increase of USD 22 million over the previous year. This improvement was due to earnings retention and the revaluation Revaluation A calculated adjustment to a country's official exchange rate relative to a chosen baseline. The baseline can be anything from wage rates to the price of gold to a foreign currency. In a fixed exchange rate regime, only a decision by a country's government (i.e. of its investments in line with international accounting standards. A.M. Best expects risk-adjusted capital to be maintained. High reliance upon retrocession cover--TIIC ceded in excess of 88% of premiums in 2002, making the company highly dependent upon the pricing and availability of retrocessional cover. The company has in place comprehensive 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. coverage with a number of high quality reinsurers, although A.M. Best is mindful that a small proportion of the TIIC's retrocessional cover (approximately 10.8% of coverage by participation) is provided by unrated reinsurers. A.M. Best will closely monitor the company's use of retrocession cover going forward. 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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