A.M. Best Affirms Ratings of Munich Re and Its Core Subsidiaries; Assigns Issuer Credit Rating.OLDWICK, N.J. -- A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the financial strength rating of A+ (Superior) of Muenchener Rueckversicherungs-Gesellschaft (Munich Re Munich Re AG, in German Münchener Rück AG (ISIN: DE0008430026), is the world's second largest reinsurance company with over 5,000 customers in 160 countries and has its headquarters in Munich, Germany. ) and its core subsidiaries. The outlook remains stable. At the same time, A.M. Best has assigned an issuer credit rating of "aa" with a negative outlook to each of these companies. The ratings on the debt securities guaranteed by Munich Re (see list below) have been affirmed, and the outlook on these ratings has been revised to negative from stable. These ratings reflect Munich's Re superior 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. business profile worldwide and excellent position in the German primary insurance market via its wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , Ergo Latin, therefore; hence; because. ergo (air-go) conj. Latin for therefore, often used in legal writings. Its most famous use was in "Cogito, ergo sum:" "I think, therefore I am" principle by French philosopher Rene Descartes (1596-1650). . The ratings also reflect the company's strong consolidated earnings and risk-based capital. The negative outlook on the issuer credit and debt ratings reflects the prospective pressure on Munich Re's consolidated capitalisation primarily given the potential for further adverse reserve development at American Re and continued small profit contribution from primary operations. Strong consolidated earnings, particularly from non-life reinsurance--Although consolidated reinsurance earnings have improved throughout 2004, the impact (approximately 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. 550 million (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. 711 million)) of recent hurricanes in the 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 the typhoon typhoon: see hurricane. in Japan are likely to limit Munich Re's full year earnings between EUR 1.8 billion - EUR 2 billion (USD 2.3 billion- USD 2.6 billion) (EUR 1.5 billion (USD 1.9 billion) for the first nine months of 2004 following a loss of EUR 487 million (USD 629 million) during the same period last year). Profit contributions from primary operations remain small due to high life bonus pay outs and high expenses. Potential pressures on risk-based capital--Munich Re's consolidated risk-adjusted capitalisation has stabilised in 2004 as a result of the diminished volatility of its equity portfolio, in particular following the reduction of its participation in Allianz and Hypo-Vereinsbank, and a decline in reinsurance premium volume. However, A.M. Best believes that pressure could arise from uncertainties regarding overall claims patterns and future liability claims inflation in the United States and lower prospective earnings due to the cyclicality of non-life reinsurance business unlikely to be offset by earnings contributions from primary insurance. At last renewals, Munich Re experienced falling rates in some areas such as North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. property catastrophe (overall reduction of approximately 15%). Recent catastrophes are unlikely to reverse the softening experienced in 2004, but 2005 rates could be maintained or soften more moderately than initially expected. The financial strength rating of A+ (Superior) has been affirmed and an issuer credit rating of "aa" has been assigned to Munich Re and its following core subsidiaries: --Munich Reinsurance Company of Australasia Limited --New Reinsurance Company --Munich Reinsurance Italy S.p.A. --Munich Reinsurance Company of Canada --Munich American Reassurance Company --Great Lakes Reinsurance (UK) PLC The debt rating of "aa" has been affirmed and a negative outlook has been assigned to the following: Muenchener Rueckversicherungs-Gesellschaft-- -- EUR 1.15 billion exchangeable bond into Allianz shares, due 2005 The debt rating of "a+" has been assigned to the following: Munich Re Finance B.V.-- -- GBP 300 million 7.625% subordinated bond, due 2028 The debt rating of "a+" has been affirmed for the following: Munich Re Finance B.V.-- -- EUR 3 billion 6.75% subordinated bond, due 2023 For a list of A.M. Best's debt ratings, please visit http://www.ambest.com/debt. 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 3,000 individual property/casualty companies, groups and industry composites, please visit http://www.ambest.com/pc. 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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