A.M. Best Assigns an "A-" -- Excellent-- to Compagnie Transcontinentale de Reassurance.OLDWICK, N.J.--(BUSINESS WIRE)--Sept. 2, 1997--Effective immediately, A.M. Best has assigned an initial rating of "A-" (Excellent) to Compagnie Transcontinentale de Reassurance (CTR See click-through rate. ), Paris, France. The rating takes into consideration CTR's strategic relationship with its new parent company, Fairfax Financial Holdings Fairfax Financial Holdings Limited TSX: FFH.SV NYSE: FFH is a Toronto, Ontario based financial services holding company which, through its subsidiaries, is engaged in property, casualty and life insurance and reinsurance, investment management and insurance claims Ltd. and its membership in the Fairfax Financial Holdings Group. CTR will be combined with Fairfax's Odyssey 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. Co. to form one global enterprise -- CTR/Odyssey International-- with U.S. operations based in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and non-U.S. operations in Paris. The rating benefits from the consolidated financial strength, capitalization and liquidity position of the combined reinsurance entity. Fairfax recognizes CTR's extensive history as one of the oldest reinsurers in France with a worldwide distribution network. CTR also provides business diversification for Fairfax, with its impressive property facultative facultative /fac·ul·ta·tive/ (fak´ul-ta?tiv) not obligatory; pertaining to the ability to adjust to particular circumstances or to assume a particular role. fac·ul·ta·tive adj. 1. franchise and its strong presence in Europe and Asia. A.M. Best believes the commitment and financial flexibility of the company's new owner will enable it to continue its geographic diversification plans and expand its product offerings. The new parent also provides some stability in CTR's competitive position. The rating acknowledges CTR/Odyssey International's solid capitalization, improved earnings prospects and stronger reserve position. The company's rating benefits from its long-standing relationships with ceding cede tr.v. ced·ed, ced·ing, cedes 1. To surrender possession of, especially by treaty. See Synonyms at relinquish. 2. companies and brokers and from its ability to be flexible and responsive to clients. CTR is focusing on writing profitable business, even if the strategy entails restraining the expansion of its portfolio. A.M. Best views favorably this philosophy, which has produced solid investment income, increased unrealized capital gains and a very favorable three year averaged combined ratio of 100. A.M. Best believes CTR will benefit from its increased loss reserve protections and establishment of an equalization reserve 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. . Rating strengths are partially offset by the threat of greater premium volatility from declining rates in soft market conditions and from higher retentions by ceding companies. A.M. Best anticipates some challenges for the company as it seeks to improve its 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. results and returns on equity. Given the company's new and more secure ownership, which provides increased access to capital and more stable earnings prospects, Best views CTR's rating outlook as stable. A.M. Best Co., established in 1899, is America's oldest and most widely recognized insurance rating and information source. CONTACT: A.M. Best, Oldwick Jeffrey Dunsavage, 908/439-2200, ext. 5618 Email: dunsavj@ambest.com |
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