A.M. Best Downgrades Rating of The American Road Insurance Company: Revises Outlook to Negative.OLDWICK, N.J. -- A.M. Best Co. has downgraded the financial strength rating to A- (Excellent) from A (Excellent) of The American Road Insurance Company (TARIC TARIC Tarif Intégré de la Communauté (French: Integrated Tariff of the European Community) TARIC Tariffa Integrata Della Comunità (Integrated Community Tariff) ) (Dearborn, MI). The rating outlook has been revised to negative from stable. A.M. Best is concerned with the operations and profitability of TARIC's ultimate parent, Ford Motor Company, and its potential impact on the operations of TARIC. In addition, the rating reflects a moderate amount of credit risk assumed by TARIC with placement of 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. to an offshore affiliate. Although TARIC's ceded leverage is well above that of its peers, nearly all of its ceded reserves are backed by an onshore on·shore adj. 1. Moving or directed toward the shore: an onshore wind. 2. Located on the shore: an onshore beacon; an onshore patrol. adv. trust account with TARIC named as the sole beneficiary. The rating recognizes TARIC's excellent 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. level, history of positive operating performance, conservative reserve practices and effective management of exposures. Over the past five years, return on surplus has averaged 19.3%, while capital and surplus levels have grown at a compound rate of 47.0% through the accumulation of net profits, which is reflective of management's focused operating strategy, disciplined 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. , efficient operating structure and a steady stream of investment income. Through the affiliation with Ford, TARIC benefits from the extensive penetration of the Ford dealerships, brand name recognition of its immediate parent, Ford Credit, its widespread marketing network and direct sales support. For Best's Ratings 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. , an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings. For current Best's Ratings and independent data on the captive captive said of naturally wild or feral animals kept in captivity for educational and scientific investigation with no attempt being made to domesticate them. and alternative insurance market, please visit http://www.ambest.com/captive/. 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 http://www.ambest.com. |
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