A.M. Best Affirms Ratings of Mutuelle Centrale de Reassurance.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of "a-" of Mutuelle Centrale de Reassurance (MCR MCR My Chemical Romance (band) MCR Minimum Capital Requirement MCR Minimum Cell Rate MCR Middle Common Room (UK universities) MCR Multivariate Curve Resolution ) (France). The outlook for both ratings is stable. The ratings reflect MCR's good business position as a niche 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 the Monceau Group and other mutual insurance companies and its excellent risk-adjusted capitalisation. The rating also factors the company's very good but slightly weaker underwriting performance in 2006. A.M. Best believes that MCR derives a competitive advantage from its exclusive 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. contract with the Monceau Group. In the open market where MCR targets analogous organisations in France and Continental Europe Continental Europe, also referred to as mainland Europe or simply the Continent, is the continent of Europe, explicitly excluding European islands and, at times, peninsulas. , premiums declined slightly in 2005 as the reinsurers cancelled some unprofitable contracts. A.M. Best expects an overall moderate growth in 2006 by approximately 2% to 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. 235 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. 299 million) from some rate increases mainly in the motor liability and property lines of business in the open market portfolio, whilst the Monceau Group business is expected to remain stable as plans to find new distribution partnerships did not materialise. A.M. Best expects MCR's underwriting results to deteriorate slightly in 2006 (with a combined ratio remaining below 100%) due to the combined impact of ongoing motor claims inflation and reduced reserve releases but still forecasts the company's overall earnings to remain very good in the next two years with a return on premiums of approximately 12% (20% in 2005). MCR's excellent results in 2005 (EUR 32 million (USD 40.7 million) after tax earnings) reflect the good underwriting performance in both the Monceau and open market portfolio but were also positively impacted by a significant reserve release (EUR 20 million (USD 25.4 million)) due to a revision of existing claims and a positive commutation. In A.M. Best's opinion, MCR's risk-adjusted capitalisation is likely to continue to improve whilst remaining in the excellent range, with shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. expected to increase by 10%-15% from 2005 to 2007 through the retention of earnings. MCR continues to benefit from the potential financial support from the associated members of Monceau Assurance but is also reciprocally obliged to provide capital support to its group members in financial difficulties, although the effect on MCR's capitalisation is likely to be limited. For current 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. , independent data and analysis on more than 330 reinsurance companies, please visit www.ambest.com/reinsurance. 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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