A.M. Best Affirms Ratings of Casiopea Re S.A.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of "a-" of Casiopea Re S.A. (Casiopea Re) (Luxembourg), the 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. captive of Telefonica S.A. (Telefonica) (Spain). The outlook on both ratings is stable. The ratings reflect Casiopea Re's excellent current and prospective risk-adjusted capitalisation, strong operating performance and improving business diversification. A.M. Best believes that Casiopea Re's business portfolio is better diversified with the integration of the O2 handsets portfolio, which accounted for a significant proportion of total gross written premiums in 2007, although the material damage and business interruption book was still dominant. Geographically, the business spread also improved and the main markets are now the United Kingdom, Spain and Central and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. . A.M. Best believes that Casiopea Re's risk-adjusted capitalisation is likely to remain excellent over the next two years, driven by the expected continuous retention of profits in the form of equalisation Noun 1. equalisation - the act of making equal or uniform equalization, leveling human action, human activity, act, deed - something that people do or cause to happen reserves and retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. . The impact of the considerable increase in net written premiums in 2007 following the O2 business portfolio transfer has been moderate. A.M. Best expects Casiopea Re's operating performance to be strong and improving to the range of EUR EUR In currencies, this is the abbreviation for the Euro. 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. 30-34 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. 60-68 million), compared to EUR 26.5 million (USD 53 million) in 2007. A.M. Best forecasts the return on equity to be very good and within 10%-12% (10.6% in 2007) and return on premium to be excellent and at approximately 30% (36% in 2007). 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. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. |
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