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LONDON, Sep 20, 2011 (BUSINESS WIRE) -- A.M. Best Europe -- Rating Services Limited has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of "bbb" of Milli Reasurans Turk Anonim Sirketi (Milli Re) (Turkey). The outlook for both ratings remains stable.
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The ratings of Milli Re continue to reflect its excellent market position in the Turkish insurance and reinsurance markets and its good risk-adjusted capitalisation. These strengths are partially offset by Milli Re's low technical profitability in its non-life portfolio; and thus, reliance on investment income.
Milli Re enjoys an excellent market position in Turkey as the only domestic reinsurer commanding a 25% market share. Furthermore, the purchase of an additional 37% share in Anadolu (one of two leading Turkish direct insurers in 2010) has further strengthened the company's domestic franchise.
Milli Re's risk-adjusted capitalisation deteriorated as a result of the purchase of Anadolu shares in September 2010. However, in A.M. Best's opinion, Milli Re's current and prospective risk adjusted capitalisation remains good and supportive of the company's current ratings.
Whilst Milli Re has a long history of generating profits, the company has consistently reported technical losses, driven by the poor performance of its motor, health and engineering business lines; and therefore, continues to rely on potentially volatile investment income. However, A.M. Best notes that the company's investment strategy is fairly conservative with the majority of assets being invested in cash or bonds.
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 utilised include: "Understanding Universal BCAR"; "Understanding BCAR for Property/Casualty Insurers"; "Natural Catastrophe Stress Test Methodology"; "Assessing Country Risk"; and "Risk Management and the Rating Process for Insurance Companies". Methodologies can be found at www.ambest.com/ratings/methodology .
In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.
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Source : marketwatch.com
Hit : 852
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