Best Sees No Change in PartnerRe Ratings from Channel Re Write Down

January 18, 2008

A.M. Best Co. indicated that its issuer credit rating (ICR) of “a-” of PartnerRe Ltd. and the financial strength rating of ‘A+’ (Superior) and ICR of “aa-” of PartnerRe Group (Hamilton, Bermuda) and its members, “are unchanged following PartnerRe’s recent announcement that it will write down its entire $74 million investment in Channel Re” (See related article). Best also said the “remaining ratings and outlook of all PartnerRe affiliates also are unchanged.”

Best noted that the “charge represents PartnerRe’s full economic exposure to Channel Re and results in a carrying value of zero on a going forward basis. The carrying value of PartnerRe’s third quarter investment in Channel Re was $74 million, which represented a 20 percent interest.” Best also indicated that it had “anticipated further devaluation of Channel Re, resulting in a 100 percent risk charge of the investment in PartnerRe’s risk-based capital model.”

In addition the rating agency said that, “although this charge will affect net income for fourth quarter 2007,” it nonetheless expects “that PartnerRe will likely report another very strong operating performance for the full year of 2007 while maintaining superior capitalization.”

Source: AM. Best –

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