A.M. Best Affirms Ratings of East Africa Reinsurance Company Limited.OLDWICK, N.J. -- A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the financial strength rating of B (Fair) and the issuer credit rating of "bb" of East Africa 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 (EARe) (Kenya). The outlook for both ratings remains stable. The ratings reflect EARe's improving risk-adjusted capitalisation n. 1. same as capitalization. Noun 1. capitalisation - writing in capital letters capitalization writing - letters or symbols that are written or imprinted on a surface to represent the sounds or words of a language; "he turned the paper , which is offset by the continuous reliance on investment returns to generate operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. and the company's relatively small size. EARe has experienced a change in the senior management team, which in A.M. Best's opinion, has improved EARe's presence in the regional market, evidenced by securing businesses from certain new territories in 2007. A.M. Best believes that EARe's risk-adjusted capitalisation is likely to further improve during 2007 and 2008, mainly as a consequence of the adoption of more sophisticated and realistic reserving systems combined with a policy of full profit retention. Furthermore, A.M. Best expects the monitoring of catastrophe exposure to improve in the near term with the implementation of new information technology systems and changes in approach to risk management. In A.M. Best's opinion, EARe's 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. performance is weak, and its overall earnings will remain reliant on its good investment performance, with net investment returns likely to stand at approximately 8% per annum Per annum Yearly. in the following two years. A.M. Best regards EARe's business profile as relatively small based on its premium volume when compared with its direct competitors. As EARe operates in an environment dominated by either regional government-owned reinsurers or large international competitors, A.M. Best believes that the company will continue to experience difficulties in expanding its premium income. 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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