A.M. Best Affirms Ratings of Electrical Contractors’ Insurance Company Limited
Business Wire, Inc. |
ECIC’s risk-adjusted capitalisation is likely to remain excellent in 2012 and into 2013, in spite of a payment to be made in the second half of 2012 of an exceptional dividend of
An offsetting rating factor is ECIC’s high reliance on third-party reinsurance, particularly quota share agreements, with the company having ceded approximately 40% of gross premiums written in 2011 (2010: 50%). However, this proportion is expected to reduce further in 2012, with subsequent reductions likely to take it to nearly 25% in 2014, thereby diminishing ECIC’s exposure to increased reinsurance rates and credit risk.
Despite challenging market conditions in the
ECIC has a good niche business profile providing insurance to electrical and mechanical building services contractors and other specialist construction professionals in the
Positive rating actions are unlikely in the near future for ECIC, whereas unexpected weak operating performance or a deterioration in its risk-adjusted capitalisation could lead to negative pressure.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Key criteria utilised include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding Universal BCAR”; “Understanding BCAR for Property/Casualty Insurers”; and “Rating Members of Insurance Groups”. Best’s Credit Rating Methodology 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
A.M. Best
Copyright © 2012 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.
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