A.M. Best Comments on American Re's $2.0 Billion 2Q Charge.Business Editors A.M. Best Co. commented today on the Munich Re Munich Re AG, in German Münchener Rück AG (ISIN: DE0008430026), is the world's second largest reinsurance company with over 5,000 customers in 160 countries and has its headquarters in Munich, Germany. Group's, Germany, decision to bolster the carried loss reserve position of its wholly owned U.S. subsidiary, American Re-Insurance, Delaware, by $2.0 billion and increase group provisions by $500 million for losses relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the World Trade Center. The financial strength rating of A++ (Superior) and the "aaa" senior debt rating of Munich Re remain unaffected, reflecting its superior level of 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. , historically excellent profitability and global market profile as the largest 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. organization in the world. Strong first half results, which include $4.7 billion in gains from the unwinding of cross-holdings with insurer Allianz AG, are more than sufficient to absorb these charges. Despite the materiality MATERIALITY. That which is important; that which is not merely of form but of substance. 2. When a bill for discovery has been filed, for example, the defendant must answer every material fact which is charged in the bill, and the test in these cases seems to of this latest reserving action to American Re and the resulting temporary decline in its stand-alone capitalization, A.M. Best continues to view American Re as a core subsidiary of Munich Re, and therefore American Re continues to be rated on a group basis with its parent. A.M. Best's view of American Re as a core subsidiary also reflects Munich Re's publicly stated intent to re-capitalize American Re to a level commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. with its superior rating and leadership position in the U.S. reinsurance market. American Re represents the group's U.S. property/casualty reinsurance franchise, contributes close to 30% of the group's premium revenue and serves the largest and most important reinsurance market in the world. A.M. Best will continue to maintain communication with the management of Munich Re and American Re to assess progress with regard to this re-capitalization, which is expected to be completed by the third quarter of 2002. 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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