A.M. Best Assigns Ratings to Wurttembergische und Badische Versicherungs-AG.OLDWICK, N.J. -- A.M. Best Co. has assigned a financial strength rating of B++ (Very Good) and an issuer credit rating of "bbb" to Wurttembergische und Badische Versicherungs-AG (WUBA WUBA Working Uniform Blue Alpha (USNA) ) (Germany). The outlook for both ratings is stable. The rating of WUBA reflects its very good risk-adjusted capitalisation, moderate business profile and good operating performance. An offsetting factor is A.M. Best's concern about the length of the investment horizon of the sole shareholder, J.C. Flowers & Co., LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control . WUBA's risk-adjusted capitalisation has been restored to a very good level through the build up of equalisation Noun 1. equalisation - the act of making equal or uniform equalization, leveling human action, human activity, act, deed - something that people do or cause to happen reserves and reduction of its portfolio following several years of underwriting losses, especially in commercial property and marine hull insurance. A.M. Best anticipates that the company's capitalisation will continue to be supported by retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. of approximately 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. 2.5 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. 3.0 million) in 2005 (compared to EUR 1.4 million (USD 1.7 million) in 2004) and further allocation to the equalisation reserves, albeit on a smaller scale due to the restructuring of its 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. programme. WUBA's business profile as a mid-sized German commercial line insurer is moderate, and the company is likely to reduce its gross premium income by a further 7% to approximately EUR 165 million (USD 192 million) in 2005. The decline is due mainly to the further cancellation of unprofitable business, particularly in the property and engineering business. The company's underwriting results significantly improved in 2004 with an excellent combined ratio of 95.6% as WUBA continues to adhere to strict underwriting controls. However, A.M. Best expects a deterioration of the net combined ratio to approximately 98% in 2005 due mainly to the effects of reinsurance, while the gross combined ratio is likely to further improve to approximately 92% (compared to 93.8% in 2004). The rating also factors A.M. Best's concerns regarding the length of the investment horizon of J.C. Flowers & Co., LLC given the larger acquisitions the shareholder has made in the past. For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. 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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