A.M. Best Affirms Ratings of DTRIC Insurance 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 DTRIC Insurance Company Limited (DTRIC) (Honolulu, HI). The outlook for both ratings is stable. The ratings reflect DTRIC's adequate capitalization, improved operating performance and conservative investment portfolio. 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. ), which measures capitalization on a risk-adjusted basis, indicates that DTRIC's capital position improved due to a capital injection 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. 5 million during the fourth quarter of 2005. Based on DTRIC's business forecast, A.M. Best believes that the company's adequate capitalization will be maintained and sufficient to support its expected future business growth. However, any further business growth beyond the current projection would create pressure on the company's capitalization level. DTRIC recorded an improvement in its expense ratio over the past five years. Due to high growth with a minimal increase in 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. expenses, the expense ratio decreased to 30.7% in 2005 from 42.9% in 2001. The combined ratio also improved to 96.3% in 2005 from 108.9% in 2001. The company's investment portfolio is very conservative, with over 60% of total assets invested in fixed income. DTRIC has a 7.5% guideline guideline Medtalk A series of recommendations by a body of experts in a particular discipline. See Cancer screening guidelines, Cardiac profile guidelines, Gatekeeper guidelines, Harvard guidelines, Transfusion guidelines. on equity investment. As of December 2005, the company had 5% of total assets in equity, which is well below the industry average of 14%. Partially offsetting these positive factors are the company's high premium growth and low investment yield. Net premiums written (NPW NPW National Payroll Week NPW National Police Week NPW Net Premiums Written NPW Net Present Worth NPW NASA ParaWing (kite) NPW Not Proceeded With NPW New Pals Welcome (swapping) ) grew by 66% over the past five years. DTRIC expects NPW to grow another 30% in 2006 before leveling off in 2007 and 2008. Due to the low interest rate environment in 2004 and 2005, DTRIC's investment yield has been low for two consecutive years, decreasing from 4.8% in 2003 to 3.7% in 2005. However, with the increase in interest rates, A.M. Best expects investment income will improve in 2006. 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. 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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