A.M. Best Assigns Ratings to ACE Tempest Life Reinsurance Ltd.OLDWICK, N.J. -- A.M. Best Co. has assigned a financial strength rating of A+ (Superior) and 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 "aa-" to ACE Tempest 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. Ltd. (ACE Tempest Life Re) (Hamilton, Bermuda). The outlook for both ratings is stable. ACE Tempest Life Re is a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of ACE Ltd. (NYSE NYSE See: New York Stock Exchange : ACE) and operates primarily in the variable annuity Variable Annuity An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio. reinsurance marketplace. The company is also the immediate parent of ACE Tempest Reinsurance Ltd., a major worldwide provider of catastrophe reinsurance. The rating assignment considers a number of factors, including the importance of global reinsurance to the ultimate parent, ACE Tempest Life Re's strong capitalization and favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. operating performance. Formed in 2000, ACE Tempest Life Re offers variable annuity reinsurance in select niche markets A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. . The company operates in an area with limited competition and currently enjoys a market leadership position. The company's conservative approach to reserving and risk selection and its high quality investment portfolio has enabled it to generate strong returns on capital. Although the vast majority of ACE Tempest Life Re's reinsurance activity and earnings is generated by its property and casualty subsidiary, life and annuity reinsurance represents a growing business segment where the demand for variable annuity secondary guarantees is strong. Accordingly, A.M. Best believes variable annuity reinsurance should provide increasing product and risk diversification for ACE Tempest Life Re over the medium term. Moreover, the company is looking to expand into the Japanese variable annuity market, an area with strong growth potential. ACE Tempest Life Re's capitalization on both a nominal basis and risk-adjusted basis is considered very strong and primarily reflects the capital at its property and casualty subsidiary. In addition, ACE Tempest Life Re capital is supported by favorable operating results, with a reported return on equity for 2003 in excess of 15%. Although the company's results are driven primarily from its large property and casualty business, life and annuity reinsurance is contributing favorably to the business mix. Offsetting rating factors include uncertainty with regard to potential sharp equity market downturns and a relatively modest market profile. For a list of A.M. Best's debt ratings, please visit http://www.ambest.com/debt. For current 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. , independent data and analysis on more than 470 reinsurance companies, please visit http://www3.ambest.com/reinsurance/. 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 http://www.ambest.com. |
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