A.M. Best Affirms Ratings of Polskie Towarzystwo Reasekuracji S.A.OLDWICK, N.J. -- A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the financial strength rating of B+ (Very Good) and the issuer credit rating of "bbb-" of Polskie Towarzystwo Reasekuracji S.A. (Polish Re) (Poland). The outlook on both ratings remains stable. The ratings reflect the improving risk-adjusted capitalisation n. 1. same as capitalization. Noun 1. capitalisation - writing in capital letters capitalization writing - letters or symbols that are written or imprinted on a surface to represent the sounds or words of a language; "he turned the paper and business diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. , which are offset by the company's current and prospective reliance upon investment income to generate profits. Although Polish Re's strategy has not been negatively impacted, A.M. Best believes that frequent changes in the chief executive officer (CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. ) position (the company has recently appointed its third CEO within a year) reveal a lack of stability in Polish Re's management. A.M. Best believes that Polish Re's risk-adjusted capitalisation is likely to continue to improve over the next two years as a result of an expected improvement of the company's capital base through 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. , and with a forecast stable level of 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. risks in line with the current level of net premium income. In A.M. Best's opinion, Polish Re is diversifying its business portfolio by reducing its exposure to motor risks (by decreasing business derived from one single cedant) and gradually increasing the proportion of property risks accepted, despite remaining a small participant in the markets in which it operates, namely Poland, where it has a market share of approximately 6%. A.M. Best views Polish Re's overall earnings as very good but believes that the company will remain reliant upon net investment returns to generate profits. Investment returns in 2006 are likely to slightly decline to a range of 5%-6% compared to 6.8% experienced in 2005. 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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