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A.M. Best Revises Outlook to Positive for Elwood Insurance Limited CONTACTS:
FOR IMMEDIATE RELEASE OLDWICK, NEW JERSEY, U.S.A., Jun. 4, 2009—A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating of B++ (Good) and issuer credit rating of “bbb” of Elwood Insurance Limited (Elwood) (Hamilton, Bermuda). Elwood’s ratings recognize its excellent capitalization level, history of positive operating performance, conservative loss reserving practices and effective management of exposures. Over the past five years, return on surplus has averaged 22.7%, while surplus levels have increased at a compound annual growth rate of 21.9% through the accumulation of net profits. Partially offsetting these positive rating factors is A.M. Best’s concern with the high balance sheet leverage of Elwood’s ultimate parent, Celanese Corporation. (Celanese) [NYSE: CE], which could negatively impact the operations of its captive. Additional offsetting rating factors are Elwood’s exposure to some low frequency, high severity hazards in its risk profile, coupled with high gross limits and high net retentions. Celanese’s risk management team takes an enterprise-wide approach to managing its risks and utilizing Elwood as an integral tool in this process. Elwood has utilized its relationships and those of Celanese to develop a variety of unique and non-correlating third party exposures, which provide a favorable enhancement to its overall book of business. Nonetheless, Elwood’s long-term growth opportunities primarily depend on Celanese’s business success. 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 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 that 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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