A.M. Best Affirms Ratings of DTRIC Insurance Company Limited and DTRIC Insurance Underwriters, Limited

HONG KONG--(BUSINESS WIRE)-- A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and issuer credit rating of “a-” of DTRIC Insurance Company Limited (DTRIC) and its reinsured affiliate, DTRIC Insurance Underwriters, Limited. The outlook for both ratings is stable. Both companies are domiciled in Honolulu, Hawaii.

The ratings reflect DTRIC’s prudent reserving practice, continued improvement in its claims experience despite the highly competitive environment in its marketplace, and its lower net premium leverage over the past five years.

The ratings also consider the explicit support from the company’s Japan-based parent, Aioi Insurance Company, Limited (Aioi), through participation on DTRIC’s major reinsurance arrangements and providing financial guarantee. In addition, DTRIC enjoys a competitive advantage in developing motor business through its strategic alliance with Toyota Motor Corporation’s partner, as well as administrative and operational services from Royal State Financial Corporation, an affiliate of Royal State Insurance Group.

Partially offsetting these positive factors are the prevailing soft market conditions and the deteriorating trend of DTRIC’s expense ratio.

DTRIC’s combined ratio increased to 105.4% in 2009 from 96.1% in 2005. The deteriorating trend of the combined ratio is due to the upward trend of the expense ratio. In 2009, DTRIC’s expense ratio slightly increased partially due to the rise in the rate of the second injury workers’ compensation fund, offsetting the impact of management’s initiatives in cutting costs.

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 utilized include: “Understanding BCAR for Property/Casualty Insurers”; “Natural Catastrophe Stress Test Methodology”; and “Rating Members of Insurance Groups.” Methodologies 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.

A.M. Best Co.
Arina Tek, +852-2827-3424
Financial Analyst
[email protected]
or
Billy Kwan, CFA, +852-2827-3405
Managing Senior Financial Analyst
[email protected]
or
Rachelle Morrow, +1-908-439-2200, ext. 5378
Senior Manager, Public Relations
[email protected]
or
Jim Peavy, +1-908-439-2200, ext. 5644
Assistant Vice President, Public Relations
[email protected]

Source: A.M. Best Co.