A.M. Best Affirms Ratings of MAPFRE RE, Compania de Reaseguros, S.A.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A+ (Superior) and the issuer credit rating of "aa" of MAPFRE MAPFRE Mutualidad Agrupación Propietarios Fincas Rústicas de España (Spanish insurance and financial institution) RE, Compania de Reaseguros, S.A. (Mapfre Re) (Spain). The outlook on both ratings is positive, in line with the ultimate parent company, Mapfre Mutualidad de Seguros y Reaseguros (Mapfre). E[acute accent acute accent n. A mark (´) indicating: a. that a vowel is close or tense, as é in French été. b. that a vowel or syllable has a high or rising pitch, as in Chinese or Ancient Greek. c. ]The ratings reflect the full enhancement received from Mapfre. The ratings also factor Mapfre Re's strong stand-alone risk-adjusted capitalisation, excellent operating performance and its leading position in the Spanish-speaking markets. E[acute accent]Strong risk-adjusted capitalisation--Mapfre Re's risk-adjusted capitalisation is strong, and A.M. Best expects this level to be maintained through a capital increase in 2007 and retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. to compensate for the strong premium growth anticipated in 2006 and 2007. E[acute accent]Excellent operating performance--In 2006, A.M Best believes the company is likely to achieve a combined ratio of approximately 91%, translating into after-tax profits of approximately EUR EUR In currencies, this is the abbreviation for the Euro. 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. 90 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. 115 million) and a return on net premiums of approximately 8% as the company is expected to limit its property and natural catastrophe exposure and focus more on personal lines. A.M. Best believes Mapfre Re benefits from the stability provided by the business written by the various Mapfre subsidiaries and the good rating environment of the open market portfolio. E[acute accent]Excellent business position--Mapfre Re has an excellent business profile in Spain and the Spanish-speaking markets. It is an integral component of the Mapfre group, as beginning in 2007, the company will be the sole 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. for various Mapfre companies (except for facultative cessions), which will account for approximately 37% of Mapfre Re's total premium in 2006. A.M. Best expects Mapfre Re's gross premiums written When a non-life insurance company closes a contract to provide insurance against loss, the revenues (premiums) expected to be received over the life of the contract are called gross premiums written. to increase by approximately 20% to EUR 1.6 billion (USD 2 billion) at year-end 2006, reflecting strong anticipated growth in Latin America. E[acute accent]For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. E[acute accent]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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