A.M. Best Downgrades Rating of LG Insurance Company.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Dec. 21, 2000 A.M. Best Co. has downgraded the financial strength rating of LG Insurance Company Ltd., Korea, to B++ (Very Good) from A- (Excellent) and removed from under review. The rating action is in response to the continued deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in the company's solvency margin caused by poor performance in its equity investments in the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. sector. In addition, the rating action reflects A.M. Best's concern about potential volatility caused by the company's solvency margin being closely tied to the performance of the Korean stock market. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the company's senior management, LG will assess its position and make arrangements for financial remedies in March 2001, when closing the current fiscal year. Measures under consideration include increasing 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. protection and raising additional capital from the stock market. Mitigating mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. the negative rating factors is the company's insurance underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. performance, which is consistent with expectations and has not affected its cash flow to date. A.M. Best will hold further discussions with the company's senior management regarding its risk management policies and its plan to manage losses from its telecommunications equity investments. 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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