A.M. Best Lowers Adamjee Insurance Co. Rating To "A-" -Excellent-.OLDWICK, N.J.--(BUSINESS WIRE)--June 15, 1998--A. M. Best Co. today lowered the "A" (Excellent) rating of Adamjee Insurance Co., Karachi, Pakistan, to "A-" (Excellent) and placed the rating under review with developing implications. The action is in response to dramatic volatility in Pakistan's stock markets and its potential impact on Adamjee's solvency The ability of an individual to pay his or her debts as they mature in the normal and ordinary course of business, or the financial condition of owning property of sufficient value to discharge all of one's debts. solvency n. . Equities and mutual funds account for 49% of the company's total assets, and the decline in values has reduced its shareholder capital and surplus. The Karachi Stock Exchange Karachi Stock Exchange The major securities exchange of Pakistan. recorded historic lows in early June following Pakistan's testing of nuclear devices. Stock prices have since recovered, but equity values are likely to continue fluctuating fluc·tu·ate v. fluc·tu·at·ed, fluc·tu·at·ing, fluc·tu·ates v.intr. 1. To vary irregularly. See Synonyms at swing. 2. To rise and fall in or as if in waves; undulate. v. in the near term as uncertainty prevails, making solvency and liquidity difficult to measure with accuracy. Adamjee's management has been diversifying its investment portfolio by adding bonds; nevertheless, the rating will remain under review until greater stability has returned to the exchange. Economic sanctions Economic sanctions are economic penalties applied by one country (or group of countries) on another for a variety of reasons. Economic sanctions include, but are not limited to, tariffs, trade barriers, import duties, and import or export quotas. threatened against Pakistan have been offset by promises of support from Middle-East states, dampening the likely negative impact on the local economy. Nevertheless, sovereign economic issues may further deteriorate de·te·ri·o·rate v. 1. To grow worse in function or condition. 2. To weaken or disintegrate. and sharply depress de·press v. 1. To lower in spirits; deject. 2. To cause to drop or sink; lower. 3. To press down. 4. To lessen the activity or force of something. local market conditions. A.M. Best has thoroughly reviewed the company's financial strength and will continue to monitor it. The Excellent rating reflects Adamjee's consistent profitability, strong market share, adequate liquidity to pay claims in the near term and the expertise of its seasoned management team. Adamjee holds about 35% of the Pakistani non-life market and is more than 50% larger than its nearest rival. Its 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 has been very strong, with a combined ratio averaging 90% over the past five years. A.M. Best Co., established in 1899, is America's oldest and most widely recognized insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com. CONTACT: Jeffrey Dunsavage (908) 439-2200, ext. 5618 dunsavj@ambest.com |
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