A.M. Best Assigns Rating to Electro Re S.A.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Jan. 10, 2002 A.M. Best Co. has assigned an A- (Excellent) financial strength rating to Electro E`lec´tro n. 1. An electrotype. Re S.A. Electro Re is the wholly owned, Luxembourg-based reinsurer re·in·sure tr.v. re·in·sured, re·in·sur·ing, re·in·sures To insure again, especially by transferring all or part of the risk in a contract to a new contract with another insurance company. of the French-based telecom company, Alcatel S.A. The rating reflects Alcatel's risk profile and Electro Re's function as an integral part of the telecom group's risk management strategy. Other rating factors are Electro Re's excellent capital base, very good financial performance and a comprehensive high quality 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. programme. Offsetting these factors is the company's parent-dependent business position. Key rating factors: Integral part of Alcatel's risk management strategy--Electro Re plays an important role in the group's risk management strategy. The group places strong emphasis on loss prevention. A separate department in Paris is responsible for managing the group's risk exposure and insurance requirements. Excellent capitalization according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. A.M. Best's risk-based capital model--Since inception and benefiting from the flexible regulatory environment in Luxembourg, Electro Re has built up a significant volume of equalization reserves Equalization Reserve A long-term reserve that an insurance company keeps for the purpose of preventing cash-flow depletion in the event of a significant unforeseen catastrophe. amounting to EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 96.8 million at year-end 2000, which A.M. Best regards as equity. Very good financial performance--Since it began operations, the company's very good financial performance is reflected in the consistent strengthening of its equalization reserves. A.M. Best expects a positive 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. result in 2001 before a transfer to the equalization reserves. Comprehensive reinsurance--The company has a comprehensive retrocession programme with high quality reinsurers in place. The retention levels for both life and non-life are prudent, and the programme provides adequate protection against severe potential losses. Parent-dependent business position--Electro Re primarily accepts risks from the Alcatel group and reinsures life and non-life business. The exception is the Thales group The Thales Group (Euronext: HO) is a major French electronics company delivering mission-critical information systems and services for the Aerospace, Defense, and Security markets. (formerly Thomson-CSF) due to its strategic alliance and satellite cover with limited exposure, which represents about 5% of the total non-life premium. The company's dependence on Alcatel business is a constraint on growth prospects. Expectations: - Capitalization will remain excellent due to limited risk exposure and further strengthening of equalization reserves. - Electro Re is not expected to write third-party business with the exception of the risks mentioned above. - The company is expected to remain profitable on an underwriting level. 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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