A.M. Best Co. Affirms the A- ,Excellent Financial Strength Rating of MCR.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Sept. 6, 2002 A.M. Best Co. has affirmed the A- (Excellent) financial strength rating of Mutuelle Centrale de Reassurance (MCR MCR My Chemical Romance (band) MCR Minimum Capital Requirement MCR Minimum Cell Rate MCR Middle Common Room (UK universities) MCR Multivariate Curve Resolution ), Paris, France. The rating reflects MCR's excellent risk-adjusted capitalisation and attractive niche business position. Offsetting factors include the company's weak underwriting performance and relatively limited financial flexibility. The rating outlook is negative. Excellent risk-adjusted capitalisation--MCR's current risk-adjusted capital base remains excellent, albeit showing a moderate deterioration at the end of the 2001. As a mutual association, the company has no shareholder or dividend pressure, although it is obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. to provide moderate capital support, if required, to the associated members of the group within specified limits. Capital contributions above these limits require unanimity UNANIMITY. The agreement of all the persons concerned in a thing in design and opinion. 2. Generally a simple majority (q.v.) of any number of persons is sufficient to do such acts as the whole number can do; for example, a majority of the legislature can pass between the group members but could, in theory, be called upon at any time. Attractive niche business position--MCR is an integral member and niche reinsurer re·in·sure tr.v. re·in·sured, re·in·sur·ing, re·in·sures To insure again, especially by transferring all or part of the risk in a contract to a new contract with another insurance company. to the mutual companies of Monceau Assurances Mutuelles Associees. This co-operative structure provides a guaranteed source of premium volume for MCR. The company has also leveraged its mutual status in targeting other mutual organisations and continues to derive a competitive advantage from these relationships; approximately 40% of MCR's external clients are mutual companies. MCR has expanded its presence in Southern Europe Southern Europe or sometimes Mediterranean Europe is a region of the European continent. There is no clear definition of the term which can vary depending on whether geographic, cultural, linguistic or historical factors are taken into account. in 2002 through greater penetration of its existing clients' 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. programmes and new cedants. Total gross premium increased 6% to 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. 214.7 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. 190.2 million) in 2001, following several years of decline, and A.M. Best expects further growth of 5%-10% in 2002. Weak underwriting performance--MCR has reported a disappointing five-year average loss ratio of 80.4% between 1997 and 2001. The technical result has steadily improved in the last five years, although it remains a loss of EUR 21.1 million (USD 18.7 million), primarily affected by MCR's dominant proportional property and motor portfolios. These portfolios have suffered due to the frequency of catastrophe losses in addition to inadequate pricing. Prospectively, A.M. Best expects MCR's results to benefit from the restructuring of the portfolios in 2002 and the pricing improvements executed in MCR's non-group portfolio, the extent of which will unfold over the next two years. Relatively limited financial flexibility--MCR's mutual status means that direct access to the capital markets and alternative sources of finance are restricted. However, EUR 16 million (USD 14.2 million) of additional financial support is automatically callable Callable Applies mainly to convertible securities. Redeemable by the issuer before the scheduled maturity under specific conditions and at a stated price, which usually begins at a premium to par and declines annually. by MCR from the associated members of Monceau Assurance should it be required. The negative outlook reflects the effect that a continued under-performance of the underwriting account will have on the prospective level of risk based capital, particularly given recent investment market volatility. 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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