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FOR IMMEDIATE RELEASE
HONG KONG - DECEMBER 14, 2010 12:00 AM (EST)
A.M. Best Co. has affirmed the financial strength ratings of A- (Excellent) and the issuer credit ratings (ICR) of "a-" of Asia Capital Reinsurance Group Pte. Ltd. (ACR) (Singapore), Asia Capital Reinsurance Malaysia Sdn Bhd (ACRM) (Malaysia), ACR ReTakaful SEA Berhad (ACR ReTakaful SEA) (Malaysia) and ACR ReTakaful MEA B.S.C. (c) (ACR ReTakaful MEA) (Bahrain). A.M. Best also has affirmed the ICRs of "bbb-" of ACR Capital Holdings Pte. Ltd. (ACR Holdings) (Singapore) and ACR ReTakaful Holdings Limited (United Arab Emirates). The outlook for all ratings is stable.
The rating actions reflect ACR, ACRM, ACR ReTakaful SEA and ACR ReTakaful MEA's solid capitalization and strong risk management capabilities. A.M. Best also acknowledges the companies' prudent reserving practice.
As demonstrated by Best's Capital Adequacy Ratio, ACR, ACRM, ACR ReTakaful SEA and ACR ReTakaful MEA's risk-adjusted capitalization levels are adequate to support their forecasted premium growth.
ACR showed good underwriting and overall operating results in fiscal year 2009-10, with an after tax profit of USD 63 million, as compared to a loss in fiscal year 2008-09 when the financial crisis occurred. Since inception in November 2006, ACR showed continuous improvement in its combined ratio, recording 92.5% in fiscal year 2009-10. According to the company's forecasts, this positive trend is likely to continue in fiscal year 2010-11.
As compared to the original business plans of ACRM, ACR ReTakaful MEA and ACR ReTakaful SEA, the actual premium size of these companies was lower than expected. The driving factor behind this is the competitive environment and the companies' discipline of selective underwriting. A.M. Best believes that there may be a challenge for the companies to achieve their forecasted business volume given the competitive environment in the markets where these companies operate.
The principal methodology used in determining these ratings is Best's Credit Rating Methodology - Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best's rating process and highlights the different rating criteria employed. Additional key criteria utilized include: "Understanding Universal BCAR"; "Natural Catastrophe Stress Test Methodology"; "Assessing Country Risk"; "Rating Members of Insurance Groups"; and "Takaful (Shari'a Compliant) Insurance Companies." Methodologies can be found at www.ambest.com/ratings/methodology.
Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.