A.M. Best Assigns A- -Excellent- Rating To BRIT Insurance Ltd., London.OLDWICK, N.J.--(BUSINESS WIRE)--July 14, 1999-- A.M. Best Co. today assigned an A- (Excellent) rating to BRIT Insurance Brit Insurance Holdings plc (LSE: BRE) is a London-based general insurance and reinsurance group. It is a member of the London Stock Exchange and a constituent of the FTSE 250 Index. Market capitalisation was over £850m as of mid-2005. Ltd., London. The rating reflects the company's excellent operating returns since its inception in 1994, together with its strong solvency The ability of an individual to pay his or her debts as they mature in the normal and ordinary course of business, or the financial condition of owning property of sufficient value to discharge all of one's debts. solvency n. . In A.M. Best's opinion, the management team has demonstrated its ability to achieve targeted profits within a well-defined strategic plan. The rating also reflects the company's experienced 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. teams and its conservative reserving and investment strategies. A.M. Best believes the company has benefited from a focused strategic plan that has been in operation since March 1998. This plan has resulted in the company's adding a new class of insurance (financial risk business on a direct or reinsured basis) that is seen as not correlating with the existing catastrophe account. In addition, 1998 was a year of change as regards the ownership of the company. Benfield & Rea Investment Trust PLC (BRIT) acquired a 29.99% in the company in December 1998. In June 1999, BRIT announced that it intended to exercise its option to acquire the 70.01% of the company that it did not already own. As a result of the proposed transaction, Benfield Greig Group will own 15.3% of the trust (assuming the partial cash alternative for Wren wren, small, plump perching songbird of the family Troglodytidae. There are about 60 wren species, and all except one are restricted to the New World. The plumage is usually brown or reddish above and white, gray, or buff, often streaked, below. Holdings, see below, is fully taken up). At the same time, BRIT announced the terms of a proposed merger with Wren Holdings Group. The group's main subsidiary, Wren Syndicates Management Ltd., has five Lloyd's syndicates under its management underwriting a major 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. account, a leading aerospace account, a non-marine account, a motor business and a focused life account. Coupled with the changes of ownership and new classes of business, both the management team and board have been strengthened. The company now is in a position to build on its strong capital base and group broker affiliation to increase its business in future years. The company's conservative solvency position (net premiums written to capital and surplus) of only 0.2 times provides the company with sufficient capacity to expand its book of business in its new and existing business classes. As a result, A.M. Best expects gross premiums written When a non-life insurance company closes a contract to provide insurance against loss, the revenues (premiums) expected to be received over the life of the contract are called gross premiums written. to increase to 60 million pounds in the next three years from 15.4 million pounds in 1998. A.M. Best further believes the company has sound investment guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. and adequate reserves based on actuarial ac·tu·ar·y n. pl. ac·tu·ar·ies A statistician who computes insurance risks and premiums. [Latin opinion. Offsetting these positive factors is the company's reliance on its affiliated broker for a large proportion of its business, including a large percentage of business from two reinsurers for catastrophe business. Historically, over 95% of premium has been sourced by the group broker company, namely Benfield Greig Ltd., although the company plans to reduce this over time. Nevertheless, the company has developed relationships with other brokers and has been accepted as security by a number of leading companies, which should diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. its client base going forward. Furthermore, the company estimates its 1999 result will be significantly affected by an increase in catastrophe claims during the first quarter of the year, resulting in a underwriting loss of approximately 1.2 million pounds. Overall, however, the company should return a modest operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. . A.M. Best will continue to monitor the company's growth--particularly the new mortgage indemnity business--to ensure that the existing strong capital level is maintained. A.M. Best Co., established in 1899, is America's oldest and most widely recognized insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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