EXPLORING OPPORTUNITIES TO MAKE BETTER
RISK ADJUSTED RETURNS -- XPLORING OPPORTUNITIES TO MAKE BETTER
RISK ADJUSTED RETURNS
Risk adjusted pricing is a key advantage to using the system and allows lenders to bid on loans based on their own pre-defined risk parameters.
Ratings further reflect the company's adequate level of capital and coverage metrics, particularly on a
risk adjusted basis and moderate usage of leverage.
The downgrade reflects weakening in PICL's
risk adjusted capitalisation due to deterioration in its financial performance caused partly by reserve strengthening in its commercial small to medium-sized (SME) account in 2006.
Fitch's Stable Outlook is driven by expectations for AEILIC to maintain good
risk adjusted capital, which should be in excess of 350% at year-end 2006, and a high-quality fixed income portfolio.
The downgrade reflects the impact of poor performance, including anticipated performance at year-end February 2006, on the Club's
risk adjusted capitalisation.
Fitch believes MFC's strong,
risk adjusted capitalization provides robust support for MFC's policyholder liabilities as well as buoyant growth.
While
risk adjusted capitalization has weakened over the past two years, NNN remains strongly capitalized for the 'BBB-' rating.
The review included an assessment of the recent losses suffered from Hurricanes Katrina and Rita and the strengthening of
risk adjusted capitalization by the issuance of common stock and perpetual non-cumulative preferred stock offerings by Odyssey Re Holdings.
Fitch also views Midland National's operating leverage as elevated and believes that, while current
risk adjusted capital is solid, the ability of statutory capitalization to support strong, sustained growth may be challenged.
This comparison results in a
Risk Adjusted Capital Ratio that is comparable across issuers and property types.
The affirmation of the financial strength ratings reflects Swiss Re America's excellent stand-alone
risk adjusted capitalization and significant market presence supported by a sophisticated senior management team, full service capabilities and exceptional business franchise.
