Best Affirms RenRe Holdings, Operating Companies Ratings

March 12, 2010

A.M. Best Co. has affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit ratings (ICR) of “aa-” of Renaissance Reinsurance Ltd. and Renaissance Reinsurance of Europe, which is headquartered in Dublin, Ireland. Best also affirmed the ICR of “a-” and all debt ratings of RenaissanceRe Holdings Ltd, as well as the FSR of ‘A’ (Excellent) and ICRs of “a” of RenRe Insurance and its members. In addition Best affirmed the FSR of ‘A’ (Excellent) and ICR of “a” of DaVinci Reinsurance Ltd.

The outlook for all ratings is stable. “The rating actions reflect RenRe’s superior level of risk-based capitalization and historically excellent underwriting track record,” said Best. “Furthermore, these rating actions also reflect the company’s outstanding risk management techniques and active capital management. RenRe maintains its superior market reputation as a leader in state-of-the-art property catastrophe modeling and risk optimization, which has attracted capital from outside companies to form several successful joint ventures including DaVinci and Top Layer Reinsurance Ltd.”

Best also pointed out that RenRe’s operating performance through December 31, 2009 “resulted in a 45 percent combined ratio and a return on average equity of 30.2 percent for the year, placing the company among the performance leaders in its Bermuda peer group. The company’s risk-based capitalization remains fully supportive of its rating level and is further enhanced by a substantial level of cash and investments held at RenaissanceRe.”

RenRe Insurance and its members provide specialty and individual risk direct insurance and quota share reinsurance to the U.S. market. “This segment has successfully grown in multi-peril crop, commercial multi-line and commercial property lines of business and is supported through reinsurance agreements provided by RenRe,” Best explained. “Operating results have been solid for RenRe Insurance and its members, while risk-based capitalization remains fully supportive of current ratings.

“Offsetting these strengths is RenRe’s exposure to high severity losses associated with catastrophic events on a worldwide basis. However, this factor is greatly mitigated by RenRe’s disciplined and analytical underwriting approach, sophisticated catastrophe modeling capabilities and active monitoring controls over both reserves and investments.”

Best summarized the companies and the ratings as follows:
The FSR of A (Excellent) and ICRs of “a” have been affirmed for RenRe Insurance and its following members:
— Glencoe Insurance Ltd.
— Stonington Insurance Company
— Lantana Insurance Ltd.
— Stonington Lloyds Insurance Company

The ICR of “bbb” has been affirmed for DaVinci Re Holdings Ltd.

The following debt ratings have been affirmed:
RenaissanceRe Holdings Ltd.—
— “a-” on $100 million 5.875 percent senior unsecured notes, due 2013
— “bbb” on $100 million 7.30 percent Series B perpetual preferred stock
— “bbb” on $250 million 6.08 percent Series C perpetual preferred stock
— “bbb” on 300 million 6.6 percent Series D perpetual preferred stock

The following indicative shelf debt ratings have been affirmed:
RenaissanceRe Holdings Ltd.—
— “a-” on senior unsecured
— “bbb+” on subordinated
— “bbb” on preferred stock
RenaissanceRe Capital Trust II—
— “bbb” on trust preferred securities

Source: A.M. Best –

Was this article valuable?

Here are more articles you may enjoy.