A.M. Best Co. announced that it has affirmed the financial strength rating of “A-” (Excellent) of Bermuda-based Evergreen Reinsurance Company, Ltd. (ERCL) with a positive outlook.
“The rating reflects ERCL’s excellent capitalization, consistently strong operating performance, and its unique role as the primary insurance carrier for its ultimate parent, Evergreen Group,” said Best. “These positive rating factors are derived from the company’s conservative underwriting standards, low cost operating structure, multiple product line book of business and broad geographic exposure base.”
However, the rating agency noted that “partially offsetting these positive rating factors is the company’s exposure to earthquakes and typhoons in the Asia/Pacific region, although the risk is mitigated by policy sublimits, prudent reinsurance and the wide geographic dispersion of assets insured. In addition, management places great emphasis on risk control and carefully monitors its writings in order to avoid a concentration of risk.”
Best said: “The rating also reflects the strong level of commitment on the part of the Evergreen Group, whose management incorporates ERCL as an integral component in the overall risk management program of the Group. Moreover, ERCL gains from its parent’s global scope and business relationships. These commitments have been developed over the last several years and encompass risks located in a number of countries in East and Southeast Asia. Third party premium volume exceeded 69 percent during 2004, but this is expected to decrease going forward.
“Overall, ERCL benefits from strong management experience and market presence of its parent, as well as adherence to a philosophy of providing a stable market for global insurance and reinsurance for the Evergreen Group and its operating subsidiaries.”
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