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A.M. Best Upgrades Issuer Credit Rating of CONTACTS:
FOR IMMEDIATE RELEASE OLDWICK, N.J., May 28, 2009—A.M. Best Co. has upgraded the issuer credit rating to “bbb+” from “bbb” and affirmed the financial strength rating of B++ (Good) of The Catholic Relief Insurance Company of America (Catholic Relief) (Omaha, NE). The outlook for both ratings is stable. The ratings reflect Catholic Relief’s balance sheet strength and recent strong operating performance. The company’s risk-adjusted capitalization had been adversely impacted by the storm activity in the Gulf of Mexico as well as the continuing presence of new and developing previously recognized sexual misconduct claims. The company has emerged from a period that had exhibited a large amount of reinsurance recoverables with all material reinsurance booked and collected at April 30, 2009. Catholic Relief exhibits favorable net premium leverage and liquidity bolstered by a low expense profile and conservative investment portfolio. The ratings acknowledge Catholic Relief’s advantage as an underwriter of risks incurred by various dioceses of the Roman Catholic Church and insured through a self-insurance fund controlled by its parent, The Catholic Mutual Relief Society (CMRS). As a result, Catholic Relief has a wide geographic diversification of risks throughout the United States and parts of Canada. Furthermore, the company has a substantial expense advantage derived from its operating as a direct writer in addition to being afforded tax-exempt status. Low underwriting expenses have afforded Catholic Relief a combined ratio that is below industry peers on five- and 10-year bases. The use of reinsurance is a function of Catholic Relief’s operating strategy, which is intended to facilitate the transfer of risk from the self-insurance pool of its parent to the reinsurance market. This factor has resulted in ceded reinsurance leverage that is several points above the commercial casualty industry composite. The concern regarding the company’s use of reinsurance is somewhat mitigated by the financial strength of and long positive relationship with its highly rated reinsurers. A.M. Best remains the leading rating agency of captive insurers rating a wide variety of more than 200 captives in the United States 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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