A.M. Best Withdraws Ratings of BEST RE Companies Business Wire LONDON -- December 18, 2012 A.M. Best Europe – Rating Services Limited has downgraded the financial strength rating (FSR) to B (Fair) from B++ (Good) and issuer credit rating (ICR) to “bb” from “bbb” of BEST RE (L) Limited (BEST RE) (Malaysia). A.M. Best also has downgraded the FSR to B+ (Good) from B++ (Good) and the ICR to “bbb-” from “bbb+” of BEST RE FAMILY (L) Limited (BEST RE FAMILY) (Malaysia). The outlook for BESTREremains negative, while the outlook for BESTREFAMILYhas been revised to negative from stable. Concurrently, A.M. Best has withdrawn the ratings at the companies’ request. The rating actions are due to the materially weakened risk-adjusted capital position of BEST RE, its reduced profitability and A.M. Best’s concerns over the company’s enterprise risk management. During the third quarter of 2012, BEST RE experienced considerable adverse development due to the Thailand flood events in 2011, resulting in underwriting losses and a deterioration in its capital position. The events of the past year have demonstrated a failure to apply underwriting controls, which raises concerns over the group’s ERM capabilities, particularly at BEST RE. Following these events, BEST RE has seen a turnover in its senior management. A.M. Best has removed the implicit support to the subsidiaries by Islamic Arab Insurance Co. (Salama) given that it has not provided capital support to the subsidiaries despite BEST RE being under capital strain. The ratings of BEST RE FAMILY reflect the potential negative impact from its sister company, BEST RE. 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 BCAR for Property/Casualty Insurers”; “Takaful (Shari’a Compliant) Insurance Companies”; “Rating Members of Insurance Groups”; and “Insurance Holding Company and Debt Ratings”. 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 Europe - Rating Services Limited Supplementary Disclosure. A.M. Best Europe – Rating Services Limited is a subsidiary of A.M. Best Company. Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED. Contact: A.M. Best Co. Michael Dunckley Associate Financial Analyst +(44) 20 7397 0321 email@example.com or Mahesh Mistry Associate Director +(44) 20 7397 0325 firstname.lastname@example.org or Rachelle Morrow Senior Manager, Public Relations +(1) 908 439 2200, ext. 5378 email@example.com or Jim Peavy Assistant Vice President, Public Relations +(1) 908 439 2200, ext. 5644 firstname.lastname@example.org
A.M. Best Withdraws Ratings of BEST RE Companies
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