A.M. Best Assigns Ratings to Markel Corporation's Shelf Registration.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Jan. 3, 2001 A.M. Best Co. has assigned indicative ratings of "bbb" for senior debt, "bbb-" for 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". and "bb+" for preferred securities to Markel Corporation's (NYSE NYSE See: New York Stock Exchange - MKL MKL Math Kernel Library (Intel) MKL Much Klown Love MKL Multi-space Karhunen-Loeve (transform) MKL Jackson, TN, USA - McKellar Field (Airport Code) MKL Modeling Kernel Language ) recently filed $475 million shelf registration. A.M. Best has affirmed the current debt and preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. ratings of Markel, while the financial strength ratings of the insurance subsidiaries remain unaffected. A.M. Best expects that any securities issued under the shelf registration will be used to reduce debt, refinance existing debt and for general corporate purposes. The ratings reflect the historically strong operating performance and capitalization of Markel's U.S. operations. The ratings also consider Markel's high level of financial leverage, the weakened financial condition of Markel International (formerly known as Terra Nova Terra Nova may refer to: In geography:
During 1999 and 2000, the capital position of Markel International declined significantly due to adverse loss reserve development, a high level of severe weather related losses, charges associated with discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. and a write-down of deferred acquisition costs. A.M. Best expects that, over the near-term, Markel International will continue to be challenged by the inadequate pricing and weak underwriting controls that existed under the former management team, which have impacted both the continuing and discontinued operations. The corrective actions A corrective action is a change implemented to address a weakness identified in a management system. Normally corrective actions are instigated in response to a customer complaint, abnormal levels if internal nonconformity, nonconformities identified during an internal audit or recently taken by management are expected to bring Markel International's balance sheet strength and operating performance more in-line with that of its core operations over the longer-term. These actions include re-underwriting the continuing programs, eliminating programs that are unable to generate adequate margins and implementing strong underwriting controls and standards. The ratings are also supported by the U.S. operation's strong level of capitalization, solid position within the specialty lines market and consistently strong operating results. The U.S. operations have benefited from management's conservative underwriting and reserving philosophy coupled with strong risk management techniques, which have produced consistently strong operating results. Additionally, the statutory capital position of the U.S. operations is enhanced by significant economic value embedded Inserted into. See embedded system. within its loss reserves, which have been amassed through consistently conservative reserving practices. Markel Corp., based in Glen Allen Glen Allen is the name of several places in the United States of America:
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. on both an admitted and excess & surplus lines basis. These products and programs are marketed through affiliated as well as unaffiliated agents and brokers. As of September 30, 2000, Markel Corp. reported total assets of $5.3 billion and equity of $690.8 million. The following indicative ratings have been assigned to Markel's shelf registration: - Markel Corporation: senior debt of "bbb"; subordinated debt of "bbb-"; preferred securities of "bb+". The following debt and preferred stock ratings have been affirmed: - Markel Corporation: senior debt rating of "bbb"; - Markel International plc: senior debt ratings of "bbb"; - Markel Capital Trust I: preferred securities rating of "bb+". 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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