A.M. Best Affirms ‘A-‘ (Excellent) Rating of Corifrance

October 1, 2002

A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) of Paris-based Corifrance and assigned it a stable outlook.

“The rating reflects the maintenance of an excellent level of financial strength and the improvement in the company’s operating performance,” said the bulletin. It noted, however that there were certain “offsetting factors” related to the uncertainties associated with the company’s future ownership. Markel Corp., Corifrance’s current parent, has indicated it wants to sell the company, but is in no great hurry to do so.

“At the end of 2001, the company reported an excellent level of capitalization as measured by A.M. Best’s risk-adjusted capital model,” said the rating agency. “On a traditional solvency basis, the level was also conservative at 0.5 times.”

“Corifrance has limited financial flexibility; however, the balance sheet is protected through the existence of a stop loss agreement with the guarantee of Markel Corporation, which provides for the payment of losses over an aggregate ratio of 120% up to a further 30% of net earned premiums,” Best’s report concluded.

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