Best Upgrades Swiss Re’s GE Acquisitions to ‘A+’

February 6, 2007

A.M. Best Co. has upgraded the financial strength ratings (FSR) to “A+” (Superior) from “A” (Excellent) and the issuer credit ratings (ICR) to “aa” from “a” of Employers Reinsurance Corporation, Westport Insurance Corporation and First Specialty Insurance Corporation, the principal companies acquired by Swiss Re from GE. Best also upgraded both the ICR and senior debt rating to “a” from “bbb” for Swiss Re Solutions Holding Corp. (formerly GE Insurance Solutions Corporation).

Best said its outlook “for the FSR is stable, whereas the outlook for the ICR and debt has been revised to negative from stable to commensurate with the ICR on these companies ultimate parent, Swiss Reinsurance Company.”

“These rating actions reflect the acquisition of these companies by Swiss Re in 2006 and the subsequent reinsurance protections the new parent has established for them since the acquisition,” Best explained. “These rating actions also consider the progress made on the integration of these companies’ operations into Swiss Re, as well as their new brand name and enhanced global market position as part of the Swiss Re organization. Additionally, the legal restructuring of various operations under Swiss Re Solutions Holding Corp’s provides it with an enhanced level of potential cash flow.

“Swiss Re currently has an FSR of ‘A+’ (Superior) and an ICR of ‘aa-‘. The outlook on the FSR is stable, while the outlook on the ICR is negative. These outlooks are reflective of A.M. Best’s concerns regarding the execution risk given the size and complexity of the acquired companies.”

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