Ratings: Hannover Re, AXIS Capital

March 14, 2008

A.M. Best Co. has revised the outlook to positive from stable for the issuer credit rating (ICR) and debt ratings of Germany’s Hannover Rueckversicherung (Hannover Re) and its rated subsidiaries. Best also affirmed these ratings as well as Hannover Re’s financial strength rating (FSR) of ‘A’ (Excellent). The outlook for the FSR remains stable. Best said it took the rating action following “Hannover Re’s strong after-tax net income of €734 million [$1.145 billion] at year-end 2007, driven by significantly higher earnings (an increase of 84 percent compared to 2006) from life reinsurance (See IJ web site – https://www.insurancejournal.com/news/international/2008/03/13/88178.htm). Best also noted Hannover Re’s “solid underwriting performance,” despite the impact of a number of larger losses (in particular, the windstorm Kyrill), and the “continuous run off of the Clarendon portfolio and the inclusion of the financial reinsurance results in the non-life segment.” Best said an “upgrade of the ICR is contingent upon the continuation of the trends exhibited given the ongoing softening of the worldwide reinsurance market.”

Standard & Poor’s Ratings Services has assigned its preliminary ‘BBB+’ senior debt, ‘BBB’ subordinated debt, and ‘BBB-‘ preferred stock ratings to Bermuda-based AXIS Capital Holdings Ltd.’s recently filed universal shelf. The new shelf has an unlimited notional amount and is in accordance with the SEC rules effective since Dec. 1, 2005. S&P also affirmed its ‘BBB+’ counterparty credit rating on AXIS Capital and its ‘A’ counterparty credit and financial strength ratings on AXIS Capital’s operating subsidiaries, all with positive outlooks.

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