A.M. Best Affirms RGA's Ratings and Revises Outlook to Stable.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) of A+ (Superior) and the issuer credit ratings (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) of "aa-" of RGA RGA Reinsurance Group of America RGA Return Goods Authorization RGA Republican Governors Association RGA Residual Gas Analyzer RGA Royal Garrison Artillery RGA Restricted Growth Association (UK) RGA Rate Gyro Assembly 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 (RGA Re) (St. Louis, MO) and RGA Life Reinsurance Company of Canada (RGA CN) (Montreal). A.M. Best has also affirmed the ICR of "a-"and the debt ratings of Reinsurance Group of America, Inc's (RGA) (NYSE NYSE See: New York Stock Exchange : RGA) (St. Louis, MO) existing debt securities and indicative ratings--with the exception of the preferred stock--under RGA's shelf registration. The outlook for all ratings has been revised to stable from negative. (See below for a complete list of the ratings.) The affirmation of the FSRs reflects RGA Re's and RGA CN's very strong franchise in the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. life reinsurance market, their new business growth, adequate risk-adjusted capitalization and better spread of risk as a result of steady growth in select international markets. In addition, the trend in GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before has been positive. Despite strong operating fundamentals, net income has been negatively impacted by a number of items including losses from its run-off Argentine pension business and accident and health business and some adverse mortality experience. A.M. Best views RGA's debt servicing capabilities favorably, with cash flows supported by profitable operations underpinned by its strong franchise in the North American life reinsurance market and enhanced by international growth. Moreover, RGA maintains a strong liquidity position, reflecting a high quality asset portfolio, strong asset liability management capabilities and adequate statutory risk-adjusted capital position. However, A.M. Best notes that in recent periods, the trend of certain GAAP balance sheet quality measures has declined. Although RGA has historically benefited from its 52.8% ownership by MetLife, Inc. (MetLife), A.M. Best believes MetLife views RGA more as an investment than a strategic part of its overall operations. Accordingly, A.M. Best is uncertain as to MetLife's commitment to RGA over the longer term, and thus, is rating RGA primarily on a stand-alone basis. Although the outlook on the ratings has been revised to stable, A.M. Best believes the potential for future earnings volatility exists, along with potential challenges inherent in raising capital as a pure stand-alone company stand-alone company An independent operating firm. For example, a large diversified firm may consider spinning off a subsidiary because, as a stand-alone company, the subsidiary would command a higher price-earnings ratio than the parent. . A.M. Best has also upgraded the indicative rating one notch to "bbb" for the 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. under RGA's shelf registration. The rating upgrade reflects A.M. Best's view that no significant difference in the ultimate recoverability in the event of default exists between RGA's existing junior subordinated debentures subordinated debenture An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before and preferred stock. The FSR of A+ (Superior) and ICRs of "aa-" have been affirmed with a stable outlook for the following companies: --RGA Reinsurance Company --RGA Life Reinsurance Company of Canada The ICR of "a-" has been affirmed with a stable outlook for Reinsurance Group of America, Inc. The following debt ratings have been affirmed with a stable outlook:
Reinsurance Group of America, Inc--
-- "a-"on $200 million 6.75% senior notes, due 2011
-- "bbb" on $400 million 6.75% junior subordinated debentures,
due 2065
RGA Capital Trust I--(guaranteed by Reinsurance Group of America,
Inc)
-- "bbb+" on $225 million 5.75% trust preferred income equity
redeemable securities (PIERS), due 2051
The following indicative ratings available under shelf registration have been affirmed:
Reinsurance Group of America, Inc--
-- "a-" on senior debt
-- "bbb+" on subordinated debt
RGA Capital Trust III and IV--
-- bbb+" on trust preferred securities
The following indicative rating available under shelf registration has been upgraded:
Reinsurance Group of America, Inc--
-- to "bbb" from "bbb-" on preferred stock
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. |
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion