A.M. Best Affirms Ratings of Royal Bank of Canada Insurance Company Ltd.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and the issuer credit rating of "a+" of Royal Bank of Canada Bank of Canada Canada's central bank, established under the Bank of Canada Act (1934). It was founded during the Great Depression to regulate credit and currency. The Bank acts as the Canadian government's fiscal agent and has the sole right to issue paper money. Insurance Company Ltd. (RBCI RBCI Radio Based Combat Identification RBCI Robin Boundary Condition Iteration (numerical method) ) (St. Michael, Barbados). The outlook for both ratings is stable. These ratings reflect RBCI's prudent capitalization, a trend of excellent 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. and operating performance, a sound investment portfolio and a favorable liquidity position. These ratings also consider the stability, expertise and synergies the company receives from its ultimate parent, Royal Bank of Canada (RBC RBC red blood cell. RBC or rbc abbr. red blood cell RBC, n See red blood cell count. RBC red blood cells; red blood (cell) count (see blood count). ). RBCI benefits from a very secure equity capital base and broad geographical spread of risk, which complements its diverse product mix, as its book of business includes 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. and 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. for life, property and credit and financial business. As the largest bank in Canada, RBC has been the source of a stable volume of credit reinsurance business, and liquidity is enhanced by the high quality of a prudently managed invested asset portfolio. Partially offsetting these rating strengths are the decline in earnings experienced in 2005, low returns generated on the investment portfolio and the challenges related to catastrophic risk management in the credit and financial and property reinsurance portfolios. Earnings for 2005, while positive, experienced a severe drop caused by property claims on losses caused by three significant hurricanes that year. In addition, the low interest rate environment has limited RBCI's investment yield, thus pressuring overall returns. In view of the negative earnings impact of the 2005 events, the company has increased the amount of retroceded property risk going forward. 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. For current Best's Ratings, independent data and analysis on more than 1,100 individual life/health companies and A.M. Best groups, please visit www.ambest.com/lh. 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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