A.M. Best Affirms Ratings of PartnerRe Group and PartnerRe Ltd.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 (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 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. 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. Due to these factors and its experienced management team, PartnerRe's operating performance compares favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to its peer group of global reinsurance companies. Through September 30, 2007, PartnerRe generated solid net income of $537.2 million, which sets the company on pace to maintain operating momentum after a record 2006 performance. Driving this performance is very strong underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. results, as non-life property/casualty operations generated a combined ratio of 81.2% through nine months 2007. Additionally, due to strong operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. , the company's invested asset base continues to expand, which increases the positive effect of net investment income on earnings. Somewhat offsetting these rating strengths are PartnerRe's moderately above average risk profile, softening softening /sof·ten·ing/ (sof´en-ing) malacia. softening a change of consistency, with loss of firmness or hardness. market conditions within the global reinsurance industry and relatively high financial leverage of Partner Re Ltd. 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. Additionally, 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, albeit at potentially reduced margins given rate softening and increased global capacity. Moreover, A.M. Best will monitor the growth in the company's life and alternative risk transfer 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, 2007, 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 27.7% prior to the partial equity credit provided under A.M. Best's debt rating criteria. A.M. Best expects that PartnerRe will maintain or improve its 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/112705partnerre.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. |
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