A.M. Best Affirms Ratings of PartnerRe S.A.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A+ (Superior) and the issuer credit rating of "aa-"of PartnerRe S.A. (France). The outlook on both ratings remains stable, in line with the outlook of its ultimate parent company, Partner 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. Co Ltd (PRL PRL - Proof Refinement Logic. Versions: micro-PRL, lambda-PRL, nu-PRL. ["PRL: Proof Refinement Logic Programmer's Manual", CS Dept, Cornell, 1983]. ). The ratings reflect the full enhancement from the implicit support provided by PRL. Other factors include PartnerRe S.A.'s strong business profile and stable stand-alone risk-adjusted capitalisation. An offsetting factor is PartnerRe S.A.'s deteriorating underwriting results in 2006. A.M. Best could reduce the level of enhancement if underwriting results continue to remain weak. Stable risk-adjusted capitalisation--A.M. Best expects PartnerRe S.A.'s risk-adjusted capitalisation to remain stable, factoring the reserve strengthening for French motor third-party liability and declining premium income. The explicit support provided by PRL, through an accident year stop-loss protection (which protects PartnerRe S.A.'s net loss ratio by 20 points in excess of 85%), was not utilised during the past three years, nor does A.M. Best expect it to be utilised in 2006. Deteriorating underwriting results--A.M. Best expects overall earnings to significantly decline in 2006 mainly due to non-life underwriting losses driven by softening premium rates and reserve strengthening for French motor. A.M. Best expects pre-tax earnings to be in the region 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. 15 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. 20 million) at year-end 2006, compared to EUR 86 million (USD 112 million) achieved in 2005, factoring stable life earnings and a deterioration in the combined ratio by approximately 5 percentage points to 106%. Strong business profile--A.M. Best expects PartnerRe S.A.'s business position, especially in France, southern Europe Southern Europe or sometimes Mediterranean Europe is a region of the European continent. There is no clear definition of the term which can vary depending on whether geographic, cultural, linguistic or historical factors are taken into account. , Benelux and Canada, to remain strong despite increasing competition. However, A.M. Best anticipates a 10% decline (to approximately EUR 450 million [USD 585 million]) in non-life gross premiums written When a non-life insurance company closes a contract to provide insurance against loss, the revenues (premiums) expected to be received over the life of the contract are called gross premiums written. in 2006 due to strict underwriting in a softening market, especially in property and motor, as well as higher net retention of clients. In the life sector, A.M. Best forecasts stable premium income (approximately EUR 165 million [USD 215 million]) as PartnerRe S.A. benefits from sustainable business A business is sustainable if it has adapted its practices for the use of renewable resources and holds itself accountable for the environmental and human rights impacts of its activities. of mortality and longevity products. For 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. , an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. 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. |
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