A.M. Best Affirms Rating of World-Wide Reassurance Company.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Jan. 16, 2003 A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) of World-Wide Reassurance Company Ltd (WWR WWR World Wide Recycling BV (Twello, The Netherlands) WWR Worldwide Workload Report WWR Wire-Wound Resistor ) (United Kingdom), a subsidiary of Scottish Annuity & Life Holdings Ltd (SALH SALH South Alberta Light Horse (Canadian Forces Reserves) ). The outlook is stable. At the same time, A.M. Best has affirmed the financial strength rating of A- (Excellent) of WWR's sister subsidiaries, Scottish Annuity & Life Insurance Company Ltd. (Cayman) and Scottish Re (U.S.) Inc. (Delaware). The rating reflects WWR's superior risk-adjusted capitalisation and funding flexibility, very good operating performance, leading business position in its niche sectors worldwide and excellent business diversification. Offsetting factors include the challenges associated with the scale of the company in the mature life 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. markets and its exposure in certain emerging markets. Superior risk-adjusted capitalisation--WWR has a significant amount of capital retained following the acquisition by SALH during 2001-2002. The current capital base is sufficient to support the company's normal business growth (30%-45% per annum Per annum Yearly. ) in the short to medium term. Additional financial and retrocessional support from the parent might be required should business growth exceed normal growth rate based on A.M. Best's risk-based capital model. WWR has no financial leverage. Excellent niche business position - WWR is the market leader in the loss of airline licence business outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and is a major 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. in selected emerging markets including the Middle East, Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and the Far East. Total gross premium written was GBP GBP In currencies, this is the abbreviation for the British Pound. 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. 32 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. 51 million) for the nine months up to September 2002, a 70% increase over the same period in 2001, and has experienced approximately 45% annual compound growth in the last five years. A.M. Best believes that business opportunities are likely to arise due to the reprioritisation of emerging markets exposure by the larger competitors and the growing significance of the life insurance industry in these markets. Very good operating performance - After-tax profits in 2001 improved to GBP 470 thousand (USD 750 thousand) from a loss of GBP 1.1 million (USD 1.7 million) in the previous year. Due to better than expected mortality experience during the year, A.M. Best expects that the after-tax profit will further improve in 2002. The company has an excellent investment and underwriting resilience to current market conditions as a result of portfolio diversification Portfolio diversification Investing in different asset classes and in securities of many issuers in an attempt to reduce overall investment risk and to avoid damaging a portfolio's performance by the poor performance of a single security, industry, (or country). and a conservative investment strategy. Challenges associated with scale - WWR is challenged to achieve greater scale in the U.K. and U.S. life reinsurance markets. Recognising this, it has shifted its total direct sales in these markets--from 40% in 2000 to around 20% in 2002-2003--to regions where it has strong pricing and competitive advantages. Expectations: -- Current risk-adjusted capitalisation is expected to maintain at a level commensurate with the current rating without material financial commitment by the parent company. -- Operational infrastructure and second tier management investments in 2002-2003 will improve in its financial and management disclosure going forward. This should ensure better control of underwriting and management as it continues to grow its critical mass as a significant global life reinsurance player. 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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