Best Affirms Transatlantic’s ‘A’ Ratings

May 13, 2009

A.M. Best Co. has affirmed the financial strength ratings of ‘A’ (Excellent) and issuer credit ratings of “a” of Transatlantic Holdings Inc. Group and its members, – Transatlantic Reinsurance Company (New York, NY) and Trans Re Zurich (Switzerland), along with Transatlantic’s separately rated member, Putnam Reinsurance Company of New York.

Best also affirmed the ICR of “bbb” and debt rating of “bbb” on $750 million 5.75 percent senior unsecured notes of Transatlantic Holdings Inc. In addition Best affirmed the indicative debt ratings of “bbb” on senior unsecured securities and “bbb-” on the subordinated securities under the shelf registration of Transatlantic Holdings. The outlook for all ratings, however, is negative.

“The ratings reflect Transatlantic’s stand-alone business profile as a leading international reinsurance organization with a diverse book of predominately casualty-oriented business,” said Best. “The ratings also consider the group’s strong management team and successful track record of stable and consistent operating results. Transatlantic continues to maintain stable employee retention, persistency among its client base and solid operating results through full year 2008 and first quarter 2009.”

Best also noted that, so far, “Transatlantic has experienced minimal impact from the turmoil surrounding American International Group.” AIG controls 59.3 percent of the group’s outstanding common shares.

“Transatlantic’s risk-adjusted capital position is adequate at its current rating level,” Best continued. But the rating agency explained that the negative outlook reflects the fact that its capitalization is “at the lower end relative to its peer group and the potential for deterioration stemming from issues surrounding AIG.”

Best said it “views Transatlantic as relatively autonomous from AIG due to its publicly traded status, independent Board of Directors and minimal amount of business transacted with AIG.” In addition Best indicated that in the future it doesn’t anticipate that “that rating actions affecting AIG necessarily will impact the ratings of Transatlantic.”

Source: A.M. Best –

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