A.M. Best Affirms Ratings of Inter-Industry Insurance Company Limited and Insurco Ltd.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of B+ (Good) and the issuer credit rating of "bbb-" of Inter-Industry Insurance Company Limited (III) (Isle of Man Noun 1. Isle of Man - one of the British Isles in the Irish Sea Man British Isles - Great Britain and Ireland and adjacent islands in the north Atlantic ) and its wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , Insurco Ltd (Insurco) (Isle of Man). The outlook on both ratings has been revised to negative from stable. The negative outlook reflects the company's current and prospective deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in operating performance driven by weakening 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. results, combined with a gradual reduction in premiums written over the past five years. Offsetting factors are its solid capital position and niche business profile. In A.M. Best's view, the continued reduction in premium volumes, with an increase in claims frequency and higher expense ratio is anticipated to keep the combined ratio above 100% in the short to medium term. The company's operating performance is expected to be pressured going forward with profits being reliant on investment income, which is expected to provide lower investment returns. A.M. Best views that the company faces significant challenges improving its performance given the current competitive market environment. III's risk-adjusted capitalisation is expected to remain strong in 2007 and 2008, despite the losses experienced during the past year. III operates in specialty chemical A Specialty chemical is a chemical produced for a specialized use. They are produced in lower volume than bulk chemicals, of which petrochemicals, made from oil feedstocks, are the most common. However, both are produced in a chemical plant. and manufactured buildings markets, where it provides commercial general liability and umbrella cover through Insurco. The company has a niche business profile, which is comprised of a small number of insureds written through Insurco. In A.M. Best's opinion, the high level of exposure per risk relative to capital and surplus and a lack of a 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. programme results both in potential earnings volatility and exposes risk-adjusted capitalisation to deterioration in the event of large losses. 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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