Large losses have reduced Reinsurance Australia’s capital to the point that it no longer meets the requirements for its Australian reinsurance license, thus forcing the company to formally stop writing new business.
Re-Australia estimated the 1999 net loss at Aus $470 million, leaving it with net assets of $50 million.
The company made it clear in January that it would lose a large amount in 1999. As a result, A.M. Best downgraded Reinsurance Australia’s ratings, creating speculation that the company would run off its reinsurance book.
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