A.M. Best Comments on Ratings of American Re-Insurance Co. and Its Subsidiaries.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Aug. 28, 2003 A.M. Best Co. has commented today that the financial strength ratings of A+ (Superior) of American Re-Insurance Company (American Re) (Princeton, NJ) and its direct insurance subsidiaries could potentially be impacted by the recent downgrade Downgrade A negative change in the rating of a security. Notes: For example, an analyst may downgrade a stock from strong buy to buy, or a bond rating agency may downgrade a bond from AAA to AA. of its parent's--Muenchener Rueckversicherungs (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. ) (Germany)--financial strength rating from A++ (Superior) to A+ (Superior), given the current level of capital support received from Munich Re. While no longer viewed as a core operating subsidiary An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. of the Munich Re group as defined by A.M. Best's rating Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. methodology, American Re remains strategically important to Munich Re. Accordingly, the rating of American Re is based on its stand-alone financial strength and the benefit it receives from the explicit and implicit financial support from Munich Re. A.M. Best is in the process of evaluating American Re's progress in the restoration of its stand-alone financial strength, including risk-adjusted 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. , adequacy of its loss reserve and prospective profitability. As a significant player in the professional 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. market, American Re is benefiting from improved market conditions. Thus far in 2003, the group has not experienced any significant earnings drag from adverse loss reserve development; as a result, American Re is reporting improved earnings and internal capital generation. A.M. Best expects to conclude its assessment within the next 30 days. 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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