Overland Park, Kan.-based Employers Reinsurance Corp. responded to Standard & Poor’s “A+” rating by reaffirming the company’s financial strength and progress on its turnaround.
“S&P’s rating says more about our past than our future,” said CEO Ron
Pressman. “We have faced the challenges of the past and made tremendous progress. ERC has never been stronger financially or strategically than it is today, and our future is bright.”
Pressman highlighted the company’s continued operating improvement and underwriting performance:
—Underwriting performance: ERC’s underwriting portfolio has been completely repositioned since 2000 under a new leadership team. The current year written combined ratio for the
company’s property and casualty businesses is below 95 percent, a key indicator of effective underwriting and profitability.
—Net income: ERC earned more than $250 million in the first half of 2003, reversing a net loss of $132 million in the first six months of 2002.
—Reserves: ERC’s reserves from prior periods have been strengthened by more than $5 billion since mid-year 2000 to recognize the industry-wide soft underwriting of the late 1990s.
—Investment portfolio: ERC’s $28 billion investment portfolio is strong and stable with more than 90 percent invested in bonds rated “A” or better.
—Surplus: ERC’s statutory surplus totals $5.5 billion, providing customers excellent long-term security.
—Capital: Additionally, GE (which owns ERC) has recapitalized ERC’s operating losses resulting from Sept. 11 and the prior year reserve strengthening in 2002 with infusions of $2.4 billion.
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