A.M. Best Downgrades Ratings of Munich Re.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--Aug. 28, 2003 A.M. Best Co. has downgraded the financial strength ratings to A+ (Superior) from A++ (Superior) of Muenchener Rueckversicherungs (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 core subsidiaries. (See list below.) At the same time, A.M. Best has downgraded Munich Re's 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. 1.15 billion 1.0% senior unsecured convertible Eurobonds Convertible eurobond A eurobond that can be converted into another asset, often through exercise of attached warrants. due June 2005 to "aa" from "aa+" and the EUR 3 billion 6.75% subordinated Eurobonds due June 2023 issued by Munich Re Finance B.V. and guaranteed by Munich Re to "a+" from "aa". The outlook on all ratings has been changed to stable from negative. These rating actions follow Munich Re's release of earnings for the first six months of 2003. Munich Re has reported an improvement of its non-life 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, but A.M. Best believes that earnings for the full year 2003 will be below expectations. Munich Re has reported a half year loss of EUR 603 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. 663 million) after a EUR 1.4 billion (USD 1.54 billion) tax provision. Munich Re still holds a superior business position as the world's largest reinsurer re·in·sure tr.v. re·in·sured, re·in·sur·ing, re·in·sures To insure again, especially by transferring all or part of the risk in a contract to a new contract with another insurance company. benefiting from its outstanding global network and underwriting capacity. The financial strength ratings have been downgraded to A+ (Superior) from A++ (Superior) of the following companies: -- Muenchener Rueckversicherungs -- Munich 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. Company of Australasia Ltd -- Great Lakes Great Lakes, group of five freshwater lakes, central North America, creating a natural border between the United States and Canada and forming the largest body of freshwater in the world, with a combined surface area of c.95,000 sq mi (246,050 sq km). Reinsurance (UK) PLC -- Munich Reinsurance Italy S.p.A. -- New Reinsurance Company -- Munich Reinsurance Company of Africa Ltd -- Munich Reinsurance Company of Canada -- Munich American Reassurance Company The following debt rating has been downgraded to "aa" from "aa+". The outlook has been changed to stable from negative. -- Muenchener Rueckversicherungs -- EUR 1.15 billion 1.0% senior unsecured convertible Eurobonds, due June 2005 The following debt rating has been downgraded to "a+" from "aa", and the outlook has been changed to stable from negative. This rating has been changed to align with the revised notching established and presented in A.M. Best's revised debt rating criteria issued July 17, 2003. -- Munich Re Finance B.V. -- EUR 3 billion 6.75% subordinated Eurobonds, due June 2023 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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