A.M. Best Affirms Ratings of First Capital Insurance 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 First Capital Insurance Limited (First Capital) (Singapore). The outlook for both ratings is stable. The ratings reflect the company's adequate capitalization, liquid investment portfolio and improved underwriting performance. First Capital's capitalization remains adequate, as demonstrated by 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, despite a higher insurance risk in recent years. The company retained an entire profit of SGD SGD In currencies, this is the abbreviation for the Singapore 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. 13 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. 8 million) in 2005, which helped it to maintain its capitalization level. The adequate capitalization is also demonstrated by Singapore's local capital adequacy ratio and net underwriting leverage, which stood at 277% and 0.3 times, respectively, in 2005. First Capital had a liquid investment portfolio with over 40% of its total assets invested into cash and short-term deposits. Benefiting from the rising interest rate environment, First Capital's interest income from cash and short-term deposits increased by 190% to SGD 1.6 million (USD 1.0 million) in 2005, thereby improving its overall investment return. First Capital's underwriting profit Underwriting profit is a term used in the insurance industry. It consists of the earned premium remaining after losses have been paid and administrative expenses have been deducted. It does not include any investment income earned on held premiums. increased by 163% to SGD 11 million (USD 7 million) in 2005, which can be attributed to the continuous improvement in the loss ratio and stable expense ratio. The loss ratio improved from 69% in 2003 to 60% in 2004 and 53% in 2005. The expense ratio has been maintained at below 20% in the past three years. Offsetting rating factors include higher investment risk and the highly competitive insurance market (over 40 direct general insurance companies in Singapore This is a list of certified insurance companies in Singapore. Insurance Brokers
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First Capital increased its investment in equity shares in 2005, which resulted in a decrease in the BCAR in 2005. However, First Capital's current level of BCAR is considered to be adequate. 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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