A.M. Best Upgrades Ratings of Transatlantic Reinsurance Company and Alleghany Corporation
August 19 2016 - 11:35AM
Business Wire
A.M. Best has upgraded the financial strength rating
(FSR) to A+ (Superior) from A (Excellent) and the issuer credit
ratings (ICR) to “aa-“ from “a+” of Transatlantic Reinsurance
Company and its subsidiaries (collectively referred to as
TransRe). In addition, A.M. Best has upgraded the ICRs to “a-” from
“bbb+” and the issue ratings of Alleghany Corporation
(Alleghany) [NYSE:Y] and Transatlantic Holdings Inc. The
outlook of each rating has been revised to stable from positive.
TransRe and Alleghany are headquartered in New York, NY.
Concurrently, A.M. Best has affirmed the FSR of A+ (Superior)
and the ICRs of “aa-” of RSUI Indemnity Company and its
reinsured subsidiaries, collectively referred to as RSUI
Group (RSUI) (headquartered in Atlanta, GA). The outlook for
each of these ratings is stable.
A.M. Best also has affirmed the FSR of A (Excellent) and the
ICRs of “a” of Capitol Indemnity Corporation and its two
subsidiaries, which operate under a pooling agreement, collectively
referred to as CapSpecialty Insurance Group (CapSpecialty)
(headquartered in Middleton, WI). The outlook for each of these
ratings is stable.
Additionally, A.M. Best affirmed the FSR of A- (Excellent) and
the ICR of “a-” of Pacific Compensation Insurance Company
(Pacific Comp) (headquartered in Thousand Oaks, CA). The outlook
for each rating remains stable. (Please see below for a detailed
listing of the companies and ratings.)
The upgrading of TransRe’s ratings reflects its strong
risk-adjusted capitalization, robust enterprise risk management and
consistent operating performance. The upgrade also reflects
TransRe’s well-regarded business profile and its highly diversified
book of business geographically and by line of business. Also
contemplated in the ratings are recent transactions that have
further bolstered TransRe’s business profile. In July 2016, TransRe
announced that it had entered into an exclusive agreement to serve
as the underwriter for U.S. and Canadian broker-sourced treaty
business on behalf of General Re Corporation, a subsidiary
of Berkshire Hathaway Inc. While the tangible benefits of
the agreement have not yet been realized, the additional capacity
is expected to enhance TransRe’s overall competitive position.
Additionally, TransRe and an American International Group,
Inc. subsidiary engaged in commutation of historical asbestos
and environmental exposures that have been a long-standing, albeit
modest, drag on overall earnings. Going forward it is A.M. Best’s
expectation that while TransRe’s return measures are unlikely to be
at the high end of the companies’ peer group, TransRe will continue
to produce favorable results, supportive of its ratings and with
lower volatility relative to peers over the course of the full
cycle.
The ratings of RSUI continue to reflect the group’s strong
risk-adjusted capitalization and excellent track record of superior
underwriting results that have outperformed the industry. Although
RSUI has significant catastrophe exposures and elevated equity
leverage in its investment portfolio, both are closely monitored
and managed as part of RSUI’s risk management planning.
CapSpecialty’s ratings recognize its strong and sustained levels
of risk-adjusted capitalization and its ongoing process of
re-orienting its book of business to produce more stable results.
CapSpecialty benefits from the implicit and explicit support of
Alleghany, its ultimate parent.
The ratings and outlooks of Pacific Comp are based on A.M.
Best’s expectation that explicit support through intercompany
reinsurance and direct capital support will remain ongoing or
increased if needed.
The FSR has been upgraded to A+ (Superior) from A (Excellent)
and the ICRs upgraded to “aa-” from “a+” for Transatlantic
Reinsurance Company and its following subsidiaries:
- TranRe Zurich Ltd.
- TransRe London Limited
- Fair American Insurance and
Reinsurance Company
- Fair American Select Insurance
Company
The FSR of A+ (Superior) and the ICRs of “aa-” have been
affirmed for the following members of RSUI Group:
- RSUI Indemnity Company
- Landmark American Insurance
Company
- Covington Specialty Insurance
Company
The FSR of A (Excellent) and ICRs of “a” has been affirmed for
the following members of CapSpecialty Insurance Group:
- Capitol Indemnity
Corporation
- Platte River Insurance
Company
- Capitol Specialty Insurance
Corporation
The following issue ratings have been upgraded:
Alleghany Corporation—-- to “a-” from “bbb+” on $299
million 5.625% senior unsecured notes, due 2020-- to “a-” from
“bbb+” on $400 million floating rate senior unsecured notes, due
2022-- to “a-” from “bbb+” on $300 million 4.9% senior unsecured
notes, due 2044
Transatlantic Holdings Inc.—-- to “a-” from “bbb+” on
$350 million 8% senior unsecured notes, due 2039
This press release relates to rating(s) that have been
published on A.M. Best’s website. For all rating information
relating to the release and pertinent disclosures, including
details of the office responsible for issuing each of the
individual ratings referenced in this release, please see A.M.
Best’s Recent Rating Activity web page.
A.M. Best is the world’s oldest and most authoritative
insurance rating and information source.
For more information, visit www.ambest.com.
Copyright © 2016 by A.M. Best Rating
Services, Inc. ALL RIGHTS RESERVED.
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version on businesswire.com: http://www.businesswire.com/news/home/20160819005485/en/
A.M. BestScott Mangan, +1 908 439 2200, ext.
5593Senior Financial
Analystscott.mangan@ambest.comorAlvise Argenton, +44
20 7397 0293Financial
Analystalvise.argenton@ambest.comorChristopher
Sharkey, +1 908 439 2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy,
+1 908 439 2200, ext. 5644Assistant Vice President, Public
Relationsjames.peavy@ambest.com
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