A.M. Best Affirms Ratings of Subsidiaries of RenaissanceRe Holdings Ltd.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--May 6, 2004 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 Renaissance 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. Ltd and the financial strength rating of A (Excellent) of the subsidiaries of Glencoe Group Holdings Ltd. (Glencoe). These are all operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. of RenaissanceRe Holdings Ltd. (RenaissanceRe) (NYSE NYSE See: New York Stock Exchange : RNR RNR Rock 'N Roll RNR Royal Naval Reserve RNR Ribonucleotide Reductase RNR Receive Not Ready (ITU-T; ISDN) RNR Research News Reporter RNR Rest and Relaxation RNR Registry of Nursing Research RNR Rest and Recreation ). Concurrently, A.M. Best has upgraded the debt ratings to "a-" from "bbb+" for trust preferred securities and to "bbb+" from "bbb" for preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. securities. Additionally, A.M. Best has affirmed RenaissanceRe's debt ratings of "a" for senior unsecured notes and "a-" for subordinated securities. All of these debt ratings are issued and available under shelf registration. All companies listed above are located in Bermuda. The outlook for all ratings is stable. These ratings reflect the group's excellent capitalization, track record of exceptional 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. performance, superior risk management techniques, as well as its seasoned and experienced management team. RenaissanceRe's 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. reported at March 2004 is $2.7 billion, and it has total capital resources in excess of $3 billion. Since 2002, RenaissanceRe's reported combined ratios have remained below the 60% level and, over the last ten years, it has generated returns on equity at the 20% range and greater. Supplementing RenaissanceRe's underwriting results is the equity and fee income, which it generates from its joint venture vehicles. In 2003, the group earned $110 million in income from these joint ventures. Offsetting these positive attributes is that RenaissanceRe's core property catastrophe reinsurance business leaves it susceptible to large catastrophic events. However, RenaissanceRe has continually proven its underwriting expertise in managing catastrophe risks and controlling exposures. Additionally, the group maintains over $4 billion of invested assets, which are conservatively managed and laddered to ensure adequate liquidity, and it has access to a $400 million credit facility. Another offsetting factor to RenaissanceRe's strengths is the rapid growth being experienced by its Glencoe group of insurance companies. These companies comprise RenaissanceRe's individual risk segment and write a meaningful volume of premium in casualty lines of business in which the group has less of an operating history. Additionally, these companies derive a material portion of their business from sources less familiar to RenaissanceRe, including program managers. However, these concerns are somewhat mitigated by the significant controls put in place and the active monitoring of this business, which is performed by the Glencoe management. A.M. Best continues to actively monitor RenaissanceRe's expansion into casualty business. The upgrade of some of the debt ratings places all of RenaissanceRe's debt issues in line with A.M. Best's debt rating methodology. A.M. Best expects that RenaissanceRe will continue to manage its outstanding debt and preferred issues to a level no greater than 35% of total capital while continuing to achieve a fixed charge coverage in the upper single-digit range or higher. A.M. Best believes RenaissanceRe is exceptionally well positioned to sustain its financial strength as rates decline in its core property catastrophe reinsurance markets. Unlike many of its peers, RenaissanceRe has demonstrated its underwriting discipline in the soft market period of the late 1990s through 2000, which then enabled it to benefit significantly from the market hardening hardening, in metallurgy, treatment of metals to increase their resistance to penetration. A metal is harder when it has small grains, which result when the metal is cooled rapidly. experienced in the wake of the September 11 attacks September 11 attacks Series of airline hijackings and suicide bombings against U.S. targets perpetrated by 19 militants associated with the Islamic extremist group al-Qaeda. and emerge as a market leader for property catastrophe reinsurance. For a complete list of RenaissanceRe Holdings Ltd's financial strength and debt ratings, please visit www.ambest.com/press/050603renaissancere.pdf. 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 470 reinsurance companies, please visit http://www3.ambest.com/reinsurance/. For a list of A.M. Best's debt ratings, please visit http://www3.ambest.com/debtratings/. 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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