A.M. Best Affirms Financial Strength and Debt Ratings of Swiss Reinsurance Company; Assigns Issuer Credit Rating.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength ratings of A+ (Superior) and assigned an "aa" issuer credit rating to Swiss 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. Company (Swiss Re Swiss Re is the world’s largest reinsurer, now that it has acquired GE Insurance Solutions (Ligi 2006). Founded in 1863, Swiss Re now operates in more than 30 countries. General Electric owns 8.9% of the firm. ) (Switzerland) and of its core subsidiaries. (See list below.). At the same time, A.M. Best has affirmed the ratings on all debt instruments and commercial paper either issued or guaranteed by Swiss Re. The outlook on all ratings is stable. These ratings reflect improved earnings anticipated at year end 2004, despite the recent hurricanes, maintenance of an extremely strong consolidated risk-adjusted capitalisation and the company's superior business position worldwide. Improving earnings--Despite the negative impact from recent hurricanes and typhoons (a total loss of approximately USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 750 million) on the property and casualty results and the reserve strengthening in its US liability portfolio, Swiss Re's consolidated earnings for the full year 2004 are likely to improve. A.M. Best also anticipates the excellent profitability of the life and health segment to remain stable with a return on operating revenue operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. of approximately 8.5% (8.6% achieved in the first half of 2004). Extremely strong risk-adjusted capitalization--Swiss Re's consolidated extremely strong risk adjusted capitalization remains supportive of its existing ratings. Quantitatively, capital has strengthened following retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. (CHF CHF In currencies, this is the abbreviation for the Swiss Franc. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 1.1 billion (USD 0.9 billion) in the first six months of 2004) and a EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 672 million mandatory convertible Mandatory Convertible A type of convertible bond that has a required conversion or redemption feature. Either on or before a contractual conversion date, the holder must convert the mandatory convertible into the underlying common stock. bond issued in July 2004 treated as hybrid equity by A.M. Best. However, the level of "soft capital" (i.e. present value of future profits, deferred acquisition costs and hybrid equity) remains relatively high. Superior worldwide business profile--as one of the leading providers of reinsurance solutions world-wide, Swiss Re's consolidated premium volume is likely to remain stable at year end 2004. The growth in life business is offset by a premium reduction from property/casualty segment (2.6% decline reflecting reduction in non-traditional reinsurance transactions in the first 6 months of 2004). A.M. Best believes that Swiss Re's increased activities in the run-off of life portfolios, while enhancing diversification, somewhat increases operational risks. For a complete list of Swiss Re's financial strength and debt ratings, please visit http://www.ambest.com/press/122302swissre.pdf. For a list of A.M. Best's debt ratings, please visit http://www.ambest.com/debt. For current Best's Ratings, independent data and analysis on more than 470 reinsurance companies, please visit http://www.ambest.com/reinsurance/. 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 http://www.ambest.com. |
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