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A.M. Best Affirms Ratings of Elwood Insurance Limited CONTACTS:
FOR IMMEDIATE RELEASE OLDWICK, NEW JERSEY, U.S.A., June 24, 2008—A.M. Best Co. has affirmed the financial strength rating of B++ (Good) and issuer credit rating of “bbb” of Elwood Insurance Limited (Hamilton, Bermuda). The outlook for both ratings is stable. Elwood’s ratings recognize its excellent capitalization level, history of positive operating performance, conservative reserve practices and effective management of exposures. Over the past five years, return on surplus has averaged 23.1%, while surplus levels have increased at a compound annual growth rate of 24.2% through the accumulation of net profits. Partially offsetting these positive rating factors is A.M. Best’s concern with the high balance sheet leverage of Elwood’s ultimate parent, Celanese Corporation [NYSE: CE], which could negatively impact the operations of its captive. Additional offsetting rating factors are Elwood’s exposure to some low frequency, high severity hazards in its risk profile, coupled with high gross limits and high net retentions. Celanese’s risk management team takes an enterprise-wide approach to managing its risks and utilizing the captive as an integral tool in this process. Elwood has utilized its relationships and those of Celanese to develop a variety of unique and non-correlating accounts, which provide a favorable enhancement to its overall book of business. Nonetheless, Elwood’s long-term growth opportunities primarily depend on Celanese’s business success. A.M. Best remains the leading rating agency of captive insurers rating a wide variety of more than 200 captives in the United States and throughout the world. For current Best’s Ratings and independent data on the captive and alternative insurance market, please visit www.ambest.com/captive. Founded
in 1899, A.M. Best Company is a global full-service credit rating organization
dedicated to serving the financial and health care service industries,
including insurance companies, banks, hospitals and health care system
providers. For more information, visit www.ambest.com. ### |
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