A.M. Best Assigns Rating to Gerling Life Reinsurance GmbH; Upgrades Ratings of Gerling Global Life Insurance Company and Gerling Global Life Reinsurance Company.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Sept. 16, 2003 A.M. Best Co. has assigned an initial financial strength rating of A- (Excellent) to Gerling Life 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. GmbH (GLR GLR Great Lakes Region GLR Global Learning Resources, Inc (Fremont, CA) GLR Greater London Radio GLR Generalized Likelihood Ratio GLR Glare GLR Gaylord, Michigan (Airport Code) ), Germany. The outlook is stable. At the same time, A.M. Best has upgraded the financial strength ratings to A- (Excellent) from B++ (Very Good) of Gerling Global Life Insurance Company (Toronto) and Gerling Global Life Reinsurance Company (Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , CA). The under review status has also been removed. The outlook for both companies is stable. GLR has been established by Gerling Konzern Globale Rueckversicherung (GKG GKG Gabah Kering Giling ) and has assumed the life reinsurance book of business previously underwritten by GKG. The rating reflects GLR's excellent risk-adjusted capitalisation, very good business position in the life reinsurance market, experienced management team and prospective excellent operating performance. The rating takes into account the fiduciary sale to VHV VHV Vereinigte Hannoversche Versicherungen (German insurance) VHV Village Health Volunteers VHV Veterans Helping Veterans (Marion County, Florida) Vermogensanlage AG, a subsidiary of the German mutual insurer, VHV Vereinigte Hannoversche Versicherung a.G. The sale will be subject to the final regulatory approval outside Germany, although A.M. Best does not expect any objections to the sale. The upgrade of the U.S. and Canadian subsidiaries reflects their strategic importance to their ultimate parent company, GKG. Excellent risk-adjusted capitalisation--A.M. Best regards GLR's prospective risk-adjusted capitalisation as excellent with initial consolidated capital of 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. 446 million (USD USD In currencies, this is the abbreviation for the U.S. Dollar. 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. 504 million) and EUR 75 million (USD 85 million) subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". . A.M. Best expects GLR to further strengthen its capital base from emerging profits. Although GLR's financial flexibility is limited under the new ownership structure and the current legal company status, A.M. Best does not anticipate additional capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. in the short term. Very good business position--GKG acquired a very good business position in the world-wide life reinsurance sector through its focus on providing value-added service and individual risk solutions. A.M. Best expects GLR to pursue a similar strategy, capitalising on GKG's business profile in this segment. Experienced management team--GLR's management team has been transferred from GKG and is highly experienced with a strong actuarial background. A.M. Best does not expect a loss of key personnel as result of the new company structure. Prospective excellent operating performance--GKG's life reinsurance portfolio was consistently profitable. The return of equity based on allocated capital is expected to be 11% in 2003. A.M. Best believes that GLR will be able to produce excellent results by continuing its conservative underwriting and pricing standards whilst expanding its life reinsurance book of business. Future ownership--In A.M. Best's view, the current ownership allows GLR to consolidate its position in the global life reinsurance market, although uncertainties regarding the sales process could have a negative impact on GLR's business profile. A.M. Best will reassess its current ratings once a final buyer has been determined. 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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