A.M. Best Affirms Ratings of New Technology Insurance.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and the issuer credit rating of "a-" of New Technology Insurance (NTI NTI NewTech Infosystems (software company, Irvine, California) NTI Nuclear Threat Initiative NTI National Transit Institute (New Brunswick, New Jersey) NTI Nunavut Tunngavik Incorporated ) (Ireland), an insurance subsidiary of The Carphone Warehouse Group plc (CPW (1) (Commercial Processing Workload) An IBM metric for system performance. CPW is designed for business applications that have a significant amount of input/output. ) (United Kingdom). The outlook on both ratings remains negative. The ratings reflect NTI's strong risk-adjusted capitalisation and very good--although declining--overall earnings offset by a further increase in risk concentration within the CPW, and a sluggish business profile. A.M. Best believes that NTI's current risk-adjusted capitalisation is strong, although it is concerned about both the significantly increased dependence on the loan to the parent company, which increases risk concentration within the group, and also the expected repatriation Repatriation The process of converting a foreign currency into the currency of one's own country. Notes: If you are American, converting British Pounds back to U.S. dollars is an example of repatriation. of capital to the parent of GBP GBP In currencies, this is the abbreviation for the British Pound. 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. 28.9 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. 59.5 million) out of the original GBP 29.9 million (USD 61.6 million) paid-up capital Paid-Up Capital The total amount of shareholder capital that has been paid in full by shareholders. Notes: Paid-up capital is essentially the portion of authorized stock that the company has issued and received payment for. . Furthermore, the A.M. Best projected reduction in annual post-tax profits over the next two years in the range of GBP 10-12 million (USD 20-25 million) (compared to GBP 22.4 million [USD 44 million] at year-end 2007) is likely to lead to a lower level of shareholders' equity. The decline in overall earnings is driven by the significant reduction in premiums retention for the group business, along with the loss of underwriting of NTI's main source of income, the UK business, when a new 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. structure was implemented in 2007. This, in A.M. Best's view, combined with the failed attempts to grow the third party business for the current financial year, has further deteriorated NTI's business profile. Despite the current situation, A.M. Best expects a slight business growth in 2008-2009 and further increases in the medium term as part of the recent third party partnerships NTI is fostering. For Best's Ratings, 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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