A.M. Best Downgrades Rating of Centre Solutions -Bermuda- Ltd.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--March 12, 2004 A.M. Best Co. has downgraded the financial strength rating to B+ (Very Good) from A- (Excellent) of Centre Solutions (Bermuda) Ltd (Hamilton, Bermuda) (Centre) and its operating subsidiaries 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. . The under review status for all ratings has been changed to negative from developing. On November 24, 2003, A.M. Best downgraded Centre's financial strength rating to A- (Excellent) from A (Excellent) and changed the under review implications to developing. At that time, A.M. Best had expressed concerns with regard to the adequacy and nature of capital support to be provided to Centre from its parent company, Zurich Financial Services Zurich Financial Services Group is a major financial services group based in Zurich, Switzerland. Global operations North America The US consumer market is served primarily by Farmers Insurance Group the third largest personal lines property & casualty insurance Group (ZFS (1) (Zettabyte File System) A distributed file system from Sun that was added to OpenSolaris in 2005 and Solaris 10 in 2006. With support for 128 bits, compared to 64 for NTFS and other contemporary file systems, storage capacity is unlimited for all practical ) (Zurich, Switzerland). Subsequently, ZFS did provide an additional $250 million of capital to Centre, increasing its overall shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. to approximately $900 million as of February 29, 2004. However, in A.M. Best's opinion, while the additional capital provided improvement to Centre's risk-adjusted capitalization, the company may continue to be exposed to further adverse loss reserve development from discontinued classes of business. A.M. Best believes that additional capital may be necessary to insulate in·su·late tr.v. in·su·lat·ed, in·su·lat·ing, in·su·lates 1. To cause to be in a detached or isolated position. See Synonyms at isolate. 2. Centre from its historical business exposures. The current 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. reflects the lack of adequate and timely capital support to maintain Centre's previous A- (Excellent) rating. As a result, A.M. Best believes there is increased uncertainty regarding Centre's future as a viable underwriting entity within ZFS. Furthermore, in A.M. Best's opinion, Centre's operations are now ancillary to ZFS and are essentially in run off. Resolution of the current under review status is predicated on the completion of further due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. by A.M. Best on Centre's current loss reserve and liquidity positions. The following financial strength ratings have been downgraded to B+ (Very Good) from A- (Excellent): -- Centre Solutions (Bermuda) Ltd -- Centre Insurance International Company -- Centre 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. International Company -- Centre Reinsurance Limited -- Centre Solutions (US) Ltd -- CentreLine Reinsurance Limited -- Centre Solutions (Asia) Ltd -- Centre Insurance Company -- ZC Specialty Insurance Company -- Centre Life Insurance Company 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. |
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion