A.M. Best Affirms Ratings of The Egyptian Reinsurance Company.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 (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of "bbb" of The Egyptian 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. Company (Egypt Re) (Egypt). The outlook on both ratings remains stable. The ratings reflect Egypt Re's solid 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 , very good investment return and prominent business profile. An offsetting factor is the company's continuing dependence upon investment income to offset 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. losses. A.M. Best expects Egypt Re's prospective risk-adjusted capitalisation to remain solid, despite the high level of credit risk associated with the concentration of the company's investment portfolio in Egypt. Approximately 40% of the company's total investments by market value are invested in domestic equities and, in A.M. Best's opinion, this exposes the company to the volatility in the stock market. A.M. Best believes that in 2006 and 2007, Egypt Re will continue to be reliant on investment income to offset underwriting losses. The 2006 and 2007 investment return is expected to be reduced to approximately 11%-12%, compared to 13.2% in 2005, due to a high but declining interest rate environment in Egypt. A.M. Best forecasts that the company's very high combined ratio is likely to stabilise Verb 1. stabilise - support or hold steady and make steadfast, with or as if with a brace; "brace your elbows while working on the potter's wheel" brace, stabilize, steady at approximately 130% in 2006 and 2007, in line with the 130.5% in 2005. This is mainly due to poor run-off of the Motor Act (compulsory motor) business and the high acquisition costs in Egypt (approximately 39% for Egypt Re in 2005). A.M. Best believes that Egypt Re will maintain its prominent business profile and forecasts that the company's gross written premiums is likely to reduce by 5% each year in 2006 and 2007 compared to 1% reduction in 2005 as a result of continuing reduction in domestic unprofitable business. 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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