A.M. Best Affirms Ratings of Munich Re.OLDWICK, NEW JERSEY Oldwick is an unincorporated area within Tewksbury Township in Hunterdon County, New Jersey, United States. The area is served as United States Postal Service ZIP Code 08858. As of the United States 2000 Census, the population for ZIP Code Tabulation Area 08858 was 177. -- 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 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 "aa-" of Muenchener Rueckversicherung (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. ) (Germany) and its rated subsidiaries. At the same time, A.M. Best has affirmed the ratings of "a" of 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 Munich Re Finance B.V. and guaranteed by Munich Re. The outlook for all ratings remains negative. The ratings reflect Munich Re's improved earnings, stable risk-adjusted capitalisation and very strong business position. The outlook could be revised to stable if Munich Re continues to have solid earnings both in 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. and primary insurance. Improved earningsCoA.M. Best expects that Munich Re's full year earnings for 2006 are likely to be higher than initially targeted with a return on risk-adjusted capitalisation of 15%. A benign hurricane season in the United States, improved non-life underwriting performance in primary insurance and higher primary life/health earnings should help Munich Re to achieve an after tax profit of 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. 2.9 billion (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. 3.6 billion) in the first nine months of 2006, similar to what was recorded for the full year 2005. A.M. Best believes there is further potential for reserve strengthening in respect of asbestos and environmental related claims in the fourth quarter of 2006, although to a lesser extent than in the past. A.M. Best believes that increased interest rates in the Eurozone Eurozone Noun same as Euroland Eurozone n → eurozona, zona euro Eurozone n → zona euro and favourable equity markets are reducing the pressure on Munich Re's primary life earnings. As a result, profits are likely to remain stable for the full year 2006 in this segment. In primary non-life, Munich Re's underwriting performance continues to be very strong (91% combined ratio in the first nine months of 2006), despite increasing pressure on premiums rates, especially in motor. Stable risk-adjusted capitalisationCoIn A.M. Best's view, Munich Re's consolidated risk-adjusted capitalisation is stabilising, despite the planned share buy back, as a result of moderate premium growth, especially in non-life reinsurance and Munich Re's continuous efforts to derisk its balance sheet and reduce its asset/liability mismatching. A.M. Best also believes that Munich Re's risk management initiatives, including risk-based capital requirements Risk-Based Capital Requirement A stated requirement of liquid reserves placed upon banks and institutions that deal in risky ventures. Notes: These requirements exist for the protection of investors who hold an interest in these types of businesses. , are likely to have a positive effect on the group's risk profile and should lead to lower volatility of earnings. However, Munich Re remains exposed to the severity and increased frequency of worldwide natural catastrophes. Very strong business positionCoMunich Re enjoys a very strong business position in the worldwide reinsurance market and an excellent business profile in primary insurance in Germany. A.M. Best expects Munich Re's consolidated gross premiums to remain stable at EUR 37-38 billion (USD 46-47 billion) for the full year 2006. In non-life reinsurance, Munich Re is benefiting from strong rate increases for natural catastrophe risk, whereas premium rates for other risks remained stable overall. Primary life is likely to see a moderate growth in new business in 2006 due to the introduction of new products and the recent change in legislation for Riester policies, which is boosting new business in the second half of 2006. In primary health, the group is benefiting from uncertainty about state health insurance in Germany leading to strong demand for supplementary private health insurance. For 2007, A.M. Best expects Munich Re to adhere to its underwriting standards, despite increased pressure on premium rates at next year's renewals. The FSR of A+ (Superior) and the ICR of "aa-" have been affirmed with a negative outlook for Munich Re and its following core subsidiaries: * 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 "a" has been affirmed with a negative outlook for the following issues: Munich Re Finance B.V.Co -- GBP GBP In currencies, this is the abbreviation for the British Pound. 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. 300 million 7.625% subordinated bonds Subordinated bonds Securities that fall after others in priority of claims on the entity in the case of financial distress. , due 2028 -- EUR 3 billion 6.75% subordinated eurobonds, due 2023 The FSR of A+ (Superior) and the ICR of "aa-" have been withdrawn for Munich Reinsurance Company of Australasia Limited, and an NR-4 (Company Request) has been assigned. 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