A.M. Best Affirms Financial Strength and Assigns Debt Ratings to PartnerRe Group.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--April 20, 2004 A.M. Best Co. has affirmed the financial strength rating of A+ (Superior) of PartnerRe Group (PartnerRe) (Hamilton, Bermuda) and its affiliated companies Affiliated Companies A situation that occurs when one company owns a minority interest (less than 50%) in another company. Also refers to companies that are related to each other in some way. Notes: An affiliated company is sometimes referred to as a subsidiary. . Concurrently, A.M. Best has assigned debt ratings of "a-" senior debt, "bbb+" subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". and "bbb" preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. to the shelf registration of PartnerRe Ltd. (NYSE NYSE See: New York Stock Exchange :PRE) and PartnerRe Finance II Inc. and the existing debt of PartnerRe Ltd. and PartnerRe Capital Trust I. A.M. Best has also assigned the debt rating of "bbb+" to the preferred securities of PartnerRe Capital Trust II and III's shelf registration. The outlook for all ratings is stable. The rating reflects PartnerRe's prominent position as a leading global multi-line reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. organization offering diversified products and international market capabilities. PartnerRe has achieved solid consolidated operating returns through its client-oriented strategy, specialized underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. expertise, diverse risk portfolio and conservative reserving practices. PartnerRe's operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. have access to capital support, in addition to reinsurance protection from Partner Reinsurance Company Ltd. (Bermuda). Reinsurance protection is provided through individual calendar year stop loss treaties. Each treaty covers all in-force, new and renewal business under contracts written by PartnerRe's operating subsidiaries. PartnerRe's superior capitalization and prominent market position enables the company to access the capital markets. Debt offerings previously issued by PartnerRe have been used to support growth in the operating subsidiaries. The current shelf filing will allow PartnerRe to periodically sell debt securities, trust preferreds, preferred and common shares, which will be used for working capital, capital expenditures, acquisitions or other general corporate purposes. A.M. Best anticipates that any issuance under the shelf filings will be used judiciously ju·di·cious adj. Having or exhibiting sound judgment; prudent. [From French judicieux, from Latin i to support additional growth and to maintain financial flexibility. PartnerRe's debt-to-adjusted-capital is expected to remain in the mid-20% range with fixed charge coverage sustained in the high single digit range. Partially offsetting PartnerRe's positive rating factors is exposure to adverse loss development principally, for U.S. casualty lines of business written from 1997 to 2001. Although relatively small in relation to PartnerRe's consolidated loss reserve position, the adverse development in U.S. casualty lines required reserve strengthening charges of approximately $90 million in 2002 and 2003, respectively. A.M. Best anticipates additional adverse loss development for these lines of business and has included appropriate charges in both PartnerRe's consolidated and PartnerRe U.S.' risk-based capital models. Furthermore, PartnerRe's earnings are susceptible to catastrophe exposure, which combined with the group's modest use of retrocessional agreements, subjects PartnerRe to a higher degree of year-over-year earnings variability earnings variability Fluctuations in a corporation's net income or earnings per share during a given period. Past earnings variability is generally considered undesirable because it makes investors less certain of future earnings per share and dividends. . For a complete listing of the financial strength and debt ratings of PartnerRe Group, please visit www.ambest.com/press/042001partnerre.pdf. For current Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , independent data and analysis on more than 470 reinsurance companies, please visit http://www3.ambest.com/reinsurance/. For a list of A.M. Best's debt ratings, please visit http://www3.ambest.com/debtratings/. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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