Fitch Affirms IFS Rating of Exporters at 'A-'; Outlook to Positive.CHICAGO -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has affirmed the insurer financial strength (IFS) rating of Exporters Insurance Company Ltd. (Exporters), a Bermuda-domiciled group captive insurance Captive insurance companies are limited purpose insurance companies established with the specific objective of financing risks emanating from their parent group or groups, they sometimes also insure risks of the parent company's customers. subsidiary of EIC EIC Editor-In-Chief EIC Euro Info Centre (DIN) EIC Earned Income Credit EIC Excellence in Cities (UK) EIC Enterprise Interaction Center (Interactive Intelligence) Corporation Ltd. (EIC) that focuses on writing credit and political risk insurance at 'A-'. In addition, Fitch has affirmed the IFS rating of Exporters Insurance Company (Europe) Ltd. (Exporters Europe) at 'A-'. The Rating Outlook has been revised to Positive from Stable. The Rating Outlook revision to Positive reflects Exporters favorable underwriting results, improved 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. profile and quality management team. The ratings also continue to reflect Exporters' competitive niche position in offering a valued insurance product, diversified portfolio of insured risks, and conservative investment portfolio, with essentially zero exposure to equities. Partially offsetting these positives is a relatively small absolute level of capital, volatile underwriting results inherent in the trade credit line of business, competitive market pricing environment, and key man risk inherent in a company of Exporters' size. Exporters has posted an operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. in each of the last four years (2003-2006) and an underwriting profit the past two years as economic and political environments in many parts of the world have continued to improve. This follows sizable operating losses in 2002 and 2001 that were driven by poor underwriting performance during a difficult credit environment. Fitch expects Exporters to maintain operating profitability in 2007, with no significant development on prior years' incurred losses, concurrent with a decline in the expense ratio. Reinsurance is extremely important to Exporters, given the large gross exposure of insured risks. Exporters' 2006/2007 reinsurance program has a weighted-average IFS rating of 'A+', improved from 'A' in the prior program, as two highly rated reinsurers - Hannover Re ('A+') as the lead reinsurer re·in·sure tr.v. re·in·sured, re·in·sur·ing, re·in·sures To insure again, especially by transferring all or part of the risk in a contract to a new contract with another insurance company. and Munich Re ('AA-') were added to the five existing participants. In addition, Exporters' ratio of reinsurance recoverables to surplus has dropped significantly in recent years to only 25.3% at year-end 2006. Fitch expects Exporters to maintain the credit quality of its reinsurance program and believes that the weighted-average credit quality of the program should be at least as high as Exporters' rating. Fitch considers Exporters' current management team to be very knowledgeable and experienced and well qualified to successfully execute the company's business strategy going forward. Exporters' senior management team includes Paul M. McGonagle, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. since July 2006, Richard S. Maxwell, chief underwriting officer since June 2005, and Paul Mooney, chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. and chief financial officer. Fitch considers Exporters' capital position to be small but adequate for the rating class. Total capital has increased only slightly (about 10%) over the past five years. However, Fitch expects Exporters to improve both its absolute and risk adjusted capital position and maintain low financial leverage. Fitch has affirmed the following ratings with a Positive Outlook: Exporters Insurance Company Ltd. Exporters Insurance Company (Europe) Ltd. --Insurer financial strength at 'A-'. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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