Corifrance Asgnd 'A-' Financial Strength Rating By S&P.LONDON--(BUSINESS WIRE)--Standard & Poor's CreditWire 5/13/98-- Standard & Poor's today assigned its 'A'-minus counterparty Counterparty The other participant, including intermediaries, in a swap or contract. credit and financial strength ratings to Compagnie de Reassurance d'Ile de France (Corifrance). The rating is based on the company's strategic importance to the Terra Nova Terra Nova may refer to: In geography:
Major rating factors: -- Standard & Poor's believes Corifrance to be strategically important to its parent the Terra Nova Group and thus benefits from its parent's financial strength. Consequently, Corifrance's rating is heavily influenced by the financial strength of the Terra Nova group (principal insurance subsidiary Terra Nova Insurance Co. Ltd.; single-'A' financial strength rating). -- Capitalization is strong, with a coverage of Standard & Poor's risk-adjusted capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. of more than 2 times (x) at year-end 1997, although in absolute terms (Alg.) such as are known, or which do not contain the unknown quantity. See also: Absolute the capital amounted to FFr245 million (US$ 42.3 million), which is very small by 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. company standards. Terra Nova acquired Corifrance in September 1997 and injected FFr99 million of additional capital before the year end. Capital and earnings are further underpinned by a stop-loss reinsurance provided by Terra Nova that takes effect when Corifrance's combined ratio reaches 110%. -- Operating performance has moved in tandem Adv. 1. in tandem - one behind the other; "ride tandem on a bicycle built for two"; "riding horses down the path in tandem" tandem with the cycle but has been very strong overall, with the company's combined ratio averaging an excellent 92.2% for 1993-1997. Over the same period, return on revenue increased to 28.6% in 1997 from a modest 2.0% in 1993, averaging 17.8%. -- Corifrance's business position on a stand-alone basis is modest, given the very small scale of its operations (FFr136.1 million gross premiums written When a non-life insurance company closes a contract to provide insurance against loss, the revenues (premiums) expected to be received over the life of the contract are called gross premiums written. in 1997). With the large players clearly dominating the reinsurance markets, Corifrance has found it increasingly difficult to enhance its business position. However, the company's new ownership and its strong relationships with cedants should allow it to strengthen its market presence. --CreditWire CONTACT: Karin Clemens, London (44) 171-826-3653 Rob Jones, London (44) 171-826-3650 For more information on criteria or subscriptions: http://www.ratings.standardpoor.com |
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