A.M. Best Affirms Ratings of Empyrean Re Ltd.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 A- (Excellent) and the issuer credit rating of "a-" of Empyrean Re Ltd. (Bermuda). The outlook for both ratings is stable. The ratings are based on the company's excellent capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. , experienced management team and sound business plan. These strengths are partially offset by the untested start-up nature and the mono-line orientation of the company. The ratings consider the company's solid risk-adjusted capital level that has met A.M. Best's stringent requirements for newly formed companies. Empyrean Re operates as a Bermuda-based 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. writing direct, 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. and retrocessional trade credit coverage produced through the broker market. Though indications of market acceptance are positive following the company's first year of operations, the ability of Empyrean Re to effectively build and establish a successful market presence can only be proven over time. A.M. Best will closely monitor Empyrean Re's progress against the business plan used to assess the assigned ratings. While the company is effectively implementing its business plan, A.M. Best recognizes the continued execution risk inherent in the start-up of a specialist reinsurance company that writes only one line of business. It also views any concentration of invested assets as a source of potential problems. However, these concerns are partially mitigated by the experienced management team, as well as the low 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. leverage contemplated in Empyrean Re's business plan and the anticipated support of Man Group plc. Man Group plc, which owns and sponsored the formation of Empyrean Re, is a publicly traded global provider of alternative investment products and a constituent of the FTSE FTSE A company that specializes in index calculation. Although not part of a stock exchange, co-owners include the London Stock Exchange and the Financial Times. Notes: The FTSE is similar to Standard & Poor's in the United States. 100. 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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