A.M. Best Co. Upgrades NAC Re Group and UK Subsidiary To "A+".OLDWICK, N.J.--(BUSINESS WIRE)--March 10, 1997--Effective immediately, A.M. Best Co. has raised its rating on the NAC See network access control. Re Group from "A" (Excellent) to "A+" (Superior). This action reflects the group's strong operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before , conservative loss reserves, superior capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. , and leadership position within the domestic 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. segment. In addition, NAC Re has further strengthened its senior management team and improved its parent's holding company financial leverage. NAC Re's sustainable competitive advantages are derived from its diverse product offerings, substantial line capacity, well-established 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. operation, specialty market expertise, and long-standing core client relationships. The group continues to benefit from "flight to quality" trends and to maintain market momentum, despite increased risk retention by several core clients and more competitive market conditions. During 1996, NAC Re increased its domestic writings nearly 10% by expanding its facultative and specialty operations, which are less susceptible to competitive pressures. In addition, NAC Re continues to increase its global capability through its UK subsidiary. These strengths are somewhat offset by its parent's above-average financial leverage, with debt to capital of 35% at year-end 1996. NAC Re Corp.'s higher financial leverage, though, is largely mitigated by sizable siz·a·ble also size·a·ble adj. Of considerable size; fairly large. siz  a·ble·ness n. funds held by the parent, favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay terms, and solid earnings coverage of its debt obligations. In addition, A.M. Best expects NAC Re's interest coverage and profitability to be sustained as a result of its facultative and specialty growth initiatives, its well-balanced treaty book, favorable loss reserve development, and absence of asbestos and environmental liabilities and earnings drag. Further, NAC RE's conservative catastrophe mitigation, reserving, and investment strategies demonstrate its commitment to offering clients the highest financial security and minimizing earnings volatility. Accordingly, NAC Re's rating outlook is stable. Concurrent with this action, the subsidiary, NAC Re International Ltd., was upgraded from "A" to "A+", reflecting the strategic role it plays in developing the group's international franchise. The action also takes into account the benefits the company derives as an integral member of the group in terms of management expertise, business opportunities and financial support. NAC Re International operates in London, Australia, and Spain, offering products that complement those of its domestic affiliates. A.M. Best Co., established in 1899, is America's oldest and most widely recognized insurance rating and information source. CONTACT: A.M. Best Co., Oldwick Jeffrey Dunsavage (908) 439-2200, ext. 5618 http://www.ambest.com |
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