A.M. Best Affirms Ratings of China International Reinsurance Company Limited.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of "a-" of China International 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 Limited (CIRe) (Hong Kong). The outlook for both ratings is stable. The rating reflects CIRe's profitable operating performance, adequate capitalization and prudent reserving practice. CIRe has benefited from moderate catastrophe losses and a favorable investment market in 2007. CIRe's earnings momentum continued in 2007 after it had a net profit of a record high level of HKD HKD In currencies, this is the abbreviation for the Hong Kong 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. 363 million in 2006. These two years of solid earnings are the key drivers of maintaining the stable outlook. Given price deterioration and increasing competition in the global reinsurance market, CIRe's ability to maintain underwriting controls and standards of determining pricing adequacy are key factors for the sustainability of the long-term operating performance. CIRe's risk-adjusted capitalization improved in 2007 compared to a year earlier due to the purchase of additional 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 and higher profit retention in 2006. The company's current level of risk-adjusted capitalization is adequate to support the ratings. In addition, the company converted HKD 820 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. 105 million) of general reserves into paid-up capital Paid-Up Capital The total amount of shareholder capital that has been paid in full by shareholders. Notes: Paid-up capital is essentially the portion of authorized stock that the company has issued and received payment for. in 2007, further demonstrating the capital commitment from its parent company, China Insurance International Holdings (CIIH CIIH China Insurance International Holdings Company Limited (stock symbol) ). However, A.M. Best believes that CIRe's weather-related catastrophic exposure is still relatively high, which has resulted in a volatile Best's Capital Adequacy Ratio Capital adequacy ratio (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR)[], is a ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss. (BCAR BCAR Brunswick County Association of Realtors BCAR British Civil Airworthiness Requirements BCAR Bullitt County Animal Rescue (Shepherdsville, KY) BCAR Business Case Analysis Report BCAR Beaver Creek Array BCAR Buffalo Civic Auto Ramps, Inc. ) over the past few years. A.M. Best remains cautious of this volatility. Although pressure on CIIH to provide additional capital to support the organic growth from its major associated companies--Tai Ping Life and Tai Ping Insurance in China--has been relieved due to the continuous improvement in the associated companies' operating results, A.M. Best is still keen to understand all risks (with regard to the associated companies) that could potentially impact CIRe's financial strength. For Best's Ratings, 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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