A.M. Best Affirms Ratings of PartnerRe Group, Its Members and PartnerRe Ltd.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 issuer credit ratings of "aa-" of PartnerRe Group (PartnerRe) (Hamilton, Bermuda) and its members. Concurrently, A.M. Best has affirmed the 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-" and debt ratings of PartnerRe's parent, PartnerRe Ltd. (Hamilton, Bermuda) [NYSE NYSE See: New York Stock Exchange : PRE]. The outlook for all ratings is stable. (See link below for a detailed listing of the companies and ratings.) The ratings reflect PartnerRe's excellent business profile, strong risk-adjusted capitalization and strong enterprise risk management practices. PartnerRe is a global provider of multi-line 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 its competitive position benefits from diversification on both a geographic and product lines basis. Despite an active natural catastrophe year of loss events including Hurricanes Ike and Gustav, PartnerRe reported a solid nine-month combined ratio of 91.4%. However, widening credit spreads and the write-down of investments, such as holdings in Lehman Brothers Lehman Brothers Holdings Inc. (NYSE: LEH), founded in 1850, is a diversified, global financial services firm. It is a participant in investment banking, equity and fixed income sales, research and trading, investment management, private equity, and private banking. , led to realized and unrealized losses Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. of $595 million through nine months 2008 results. Additionally, PartnerRe's investment losses as well as common share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. led to a decline in shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of 5.5% through nine months 2008 results. Nonetheless, PartnerRe maintains a conservative investment portfolio with greater than 95% of fixed income holdings rated investment grade or better, which together with strong operating cash flows Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. , increases the positive effect of net investment income on earnings. Somewhat offsetting these rating strengths are PartnerRe's moderately above average risk profile and the financial leverage of PartnerRe Ltd., which is at the upper end of the acceptable range for its rating. As an assumer of risk, PartnerRe's earnings and capitalization are subject to large shock losses including natural catastrophes. In order to mitigate overall exposure to large losses, PartnerRe manages catastrophe exposure on a zonal aggregate basis and limits its exposure as a percentage of total capital within identified zones. Furthermore, as part of its strong enterprise risk management process, PartnerRe continually assesses its overall risk position, including loss reserve risk, investment risk and credit risk and runs various scenarios to highlight any potential correlation exposure. A.M. Best believes that PartnerRe's long standing strategy of cycle management through diversification should allow it to successfully manage through the current underwriting cycle. Moreover, A.M. Best will monitor the growth in the company's life and capital market segments as these product offerings differ from PartnerRe's traditional property/casualty reinsurance operations and are expected to be areas of growth for the company. At September 30, 2008, PartnerRe Ltd. maintained unadjusted total debt, preferred and hybrid securities Hybrid Security A security that combines two or more different financial instruments. Notes: Hybrid securities generally combine both debt and equity characteristics. to total capital of approximately 28% prior to the partial equity credit provided under A.M. Best's debt rating criteria. A.M. Best expects that PartnerRe Ltd. will maintain its current level of financial leverage while maintaining a fixed charge coverage in the mid to upper single-digit range. For a complete listing of PartnerRe Group's and PartnerRe Ltd.'s FSRs, ICRs and debt ratings, please visit www.ambest.com/press/012005partnerre.pdf. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion