A.M. Best Affirms and Assigns Ratings to First Net Insurance 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+ (Good) and assigned an 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-" to First Net Insurance Company (First Net) (Guam). The outlook for both ratings is stable. The ratings reflect First Net's continued profitable operating performance, conservative 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. leverage and local market knowledge. The ratings also consider the company's conservative investment portfolio and moderate net premium leverage ratio. The company's capital and surplus position has improved substantially over the past five years as a result of continued favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. underwriting performance and financial support provided by its owner. First Net's modest five-year average loss ratio of 39.9% is indicative of the company's solid underwriting performance. The company's five-year average combined ratio was 81.1%. First Net has produced favorable results through continued refinement in underwriting criteria and through the maintenance of various vital 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. programs. Continued surplus appreciation combined with moderate premium growth has resulted in a conservative net premium written leverage measure in recent years. Partially offsetting these rating factors is the company's geographic business concentration with a corresponding exposure to weather-related catastrophe events. The company continues to maintain various comprehensive reinsurance programs to mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. the impact of the frequency and severity of losses
associated with both non-catastrophe and catastrophe exposures. However,
as a result of its reliance on these reinsurance programs, First Net is
exposed to the risk of contract disputes and non-payment issues.
Furthermore, unfavorable changes to these programs could potentially
have a negative impact on operating results.
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. 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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