A.M. Best Places Ratings of Associated Electric & Gas Insurance Services Limited Under Review with Negative Implications.OLDWICK, N.J. -- A.M. Best Co. has placed the financial strength rating of A (Excellent) and issuer credit rating of "a" of Associated Electric & Gas Insurance Services Limited (AEGIS) (Hamilton, Bermuda) under review with negative implications. These rating actions are due in part to the unexpected 30.0% decline in surplus as of December 31, 2008, compared to year-end December 31, 2007. The rating actions follow AEGIS' disappointing net loss for 2008 that included significant investment losses, which produced a $323.4 million erosion in policyholders' surplus in 2008. A.M. Best also is concerned that the continuing turmoil in the financial markets could further erode Erode (ĕrōd`), city (1991 urban agglomeration pop. 361,755), Tamil Nadu state, S India, on the Kaveri River. The city is located in a cotton-growing region, and its industries include cotton ginning and the manufacture of transport equipment. AEGIS' capital position and negatively impact its earnings in 2009. Furthermore, A.M. Best assigned a negative outlook to AEGIS' ratings on December 5, 2006 due to concerns that its risk-adjusted capitalization--as measured by Best's Capital Adequacy Ratio Capital adequacy ratio (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR)[], is a ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss. (BCAR BCAR Brunswick County Association of Realtors BCAR British Civil Airworthiness Requirements BCAR Bullitt County Animal Rescue (Shepherdsville, KY) BCAR Business Case Analysis Report BCAR Beaver Creek Array BCAR Buffalo Civic Auto Ramps, Inc. )--had declined over the previous three-year period due largely to loss reserve growth outpacing policyholders' surplus. The ratings will remain under review pending A.M. Best's imminent review and further discussions with management, and the company's actuaries relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the potential purchase of a loss reserve adverse development 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. cover for AEGIS' workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. , excess casualty, pollution and Directors & Officers portfolios in force at December 31, 2008. After this initiative has been completely analyzed, A.M. Best will re-evaluate AEGIS' ratings to determine whether it has a sufficient capital cushion to weather any additional negative effects from the continuing turmoil in the financial markets as well as 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. risks and any other unexpected events. A.M. Best remains the leading rating agency of captive insurers rating a wide variety of more than 200 captives in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and throughout the world. For current Best's Credit Ratings and independent data on the captive and alternative insurance market, please visit www.ambest.com/captive. The principal methodologies used in determining these ratings, including any additional methodologies and factors, which may have been considered, can be found at www.ambest.com/ratings/methodology. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. |
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