A.M. Best Affirms Rating of Hannover Ruckversicherung AG; Revises Outlook to Stable.OLDWICK, N.J. -- A.M. Best Co. has affirmed the A (Excellent) financial strength rating of Hannover Ruckversicherung AG (Hannover Re Hannover Re (FWB: HNRGn), in German Hannover Rückversicherung AG, with gross premium of around €9 billion in 2006, is one of the five largest reinsurance groups in the world. Its headquarters are in Hanover, Germany. ) (Germany) and its core subsidiaries. (See list below.) At the same time, the "bbb+" ratings have been affirmed on the 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". issued by Hannover Finance Inc. (United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ) and Hannover Finance (Luxembourg) S.A and guaranteed by Hannover Re. The outlook on these ratings has been revised to stable from negative. A.M. Best has also assigned a bbb+ rating to the 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. 750 million subordinated bond A Subordinated bond is a bond that has a lower priority than other bonds of the issuer in case of liquidation during bankruptcy. In case of liquidation, there is a hierarchy of creditors. First the liquidator is paid, then government taxes, and so on. due 2024 issued by Hannover Finance (Luxembourg) S.A. and guaranteed by Hannover Re. At the same time, an issuer credit rating (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 "a" with a stable outlook has been assigned to all entities. These ratings reflect Hannover Re's excellent business position, improving risk-adjusted capitalization and financial flexibility, which is offset by the still relatively high dependence on 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. recoverables. The ratings also factor the company's lower earnings, due to a number of natural catastrophes, albeit in line with the current rating. Improving Risk-Adjusted Capitalisation and Financial Flexibility--Hannover Re's risk-adjusted capitalisation has benefited from the EUR 750 million subordinated bond (partially replacing the 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. 400 million subordinated bond) issued early in the year and treated as hybrid capital in the A.M. Best capital assessment. Hannover Re's dependence on reinsurance recoverables and underwriting leverage (technical reserves/shareholder funds) remains high at above 210%, as the reduction in 2004 was somewhat offset by an increase in claims provisions for the recent catastrophes. Financial flexibility has been enhanced as result of the increase in free float Free float An exchange rate system characterized by the absence of government intervention. Also known as clean float. to 48.8%, but remains somewhat dependent on its ultimate parent, HDI HDI Human Development Index (UNDP yardstick of human welfare) HDI Help Desk Institute HDI Humpty Dumpty Institute (New York, New York) HDI High Density Interconnect , which in turn is limited due to its mutual status. Lower earnings--A.M. Best forecasts that Hannover Re's earnings in 2004 are likely to be lower than the EUR 354 million (USD 473 million) achieved in 2003, due the significant exposure to a number of natural catastrophes (approximate loss of EUR 358 million (USD 479 million)), but remain within A.M. Best's expectations for the current rating. A.M. Best anticipates an improvement in consolidated earnings for Hannover Re in 2005 as rate softening remains moderate. The A (Excellent) financial strength ratings of the following core companies of Hannover Rueckversicherung AG have been affirmed. The outlook has been revised to stable from negative.
-- E+S Rueckversicherungs - AG
-- Hannover Reinsurance (Ireland) Limited
-- E+S Reinsurance (Ireland) Ltd
-- Insurance Corporation of Hannover
-- Hannover Life Reassurance (Ireland) Limited
A 'bbb+' rating has been assigned to the following debt issue with
a stable outlook.
Hannover Finance (Luxembourg) S.A.--
-- EUR 750 million subordinated fixed to floating rate bond, due
2024 and guaranteed by Hannover Re
The 'bbb+' rating for the following debt issues have been
affirmed. The outlook has been revised to stable from negative.
Hannover Finance Inc. (United States)--
-- USD 400 million subordinated bond, due March 2029
Hannover Finance (Luxembourg) S.A.--
-- EUR 350 million subordinated debt, due March 2031
(Both issues guaranteed by Hannover Re)
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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