A.M. Best Affirms Ratings of RenaissanceRe Holdings Ltd. and Its Subsidiaries
August 19 2016 - 12:43PM
Business Wire
A.M. Best has affirmed the financial strength rating
(FSR) of A+ (Superior) and the issuer credit ratings (ICR) of “aa-”
of Renaissance Reinsurance Ltd. (RenRe) and Renaissance
Reinsurance of Europe (Dublin, Ireland). A.M. Best also
affirmed the ICR of “a-” and all issue ratings of RenaissanceRe
Holdings Ltd. (RenaissanceRe) [NYSE:RNR]. The outlook for each
of these ratings remains negative.
Additionally, A.M. Best has affirmed the FSR of A (Excellent)
and the ICR of “a+” of DaVinci Reinsurance Ltd. (DaVinci),
as well as the ICR of “bbb+” of DaVinci Re Holdings Ltd. The
outlook for the FSR of DaVinci remains stable, while the outlook
for the ICRs of DaVinci and DaVinci Re Holdings Ltd. remains
negative.
Concurrently, A. M. Best has affirmed the FSR of A (Excellent)
and the ICR of “a” of RenaissanceRe Specialty Risks Ltd.
(RenRe Specialty Risks). The outlook for each rating remains
stable. A.M. Best also has upgraded the ICR of Renaissance
Reinsurance US Inc (RenRe US) to “a+” from “a” and affirmed the
FSR of A (Excellent). The outlook for the ICR is revised to stable
from positive while the outlook for the FSR remains stable. Lastly,
A.M. Best has affirmed the FSR of A (Excellent) and the ICR of “a”
of RenaissanceRe Specialty US Ltd (RenRe Specialty US Ltd).
The outlook for each rating remains stable. All of the
aforementioned companies are domiciled in Bermuda unless otherwise
specified (See below for a detailed listing of the issue
ratings.)
The rating actions reflect RenRe’s superior level of
risk-adjusted capitalization, the strength and depth of its
management team and the ability of the company to deliver strong
long-term profitability over the course of the insurance cycle. The
company is widely recognized for its thoughtful leadership in
enterprise risk management and as a pioneer in third-party capital
management. In that regard, 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 investors to form several successful joint ventures,
including DaVinci and Top Layer Reinsurance Ltd.
The ratings of DaVinci recognize its solid operating performance
over the past several years and the maintenance of its strong
risk-adjusted capitalization. DaVinci’s profile is enhanced due to
its affiliation with RenRe.
The ratings of RenRe Specialty Risks, RenRe US and RenRe
Specialty US Ltd. acknowledge their strong risk-adjusted
capitalization, sound business plans and strategic positioning for
writing casualty specialty risks. The ratings are enhanced based on
implicit and explicit support. In addition, the aforementioned
companies’ profiles are enhanced due to their affiliation and
branding as RenRe companies.
Offsetting these strengths is RenRe’s exposure to high severity
losses associated with catastrophic events. The global reinsurance
market in general, and specifically the property catastrophe
segment, has been experiencing overcapacity and resulting price
pressures on rates that have pressured historically high return
measures. The negative outlooks on the ICRs of RenRe and DaVinci
reflect these adverse market conditions. The pricing pressure
coupled with the flow of alternative capital and increased
retentions of primary companies have exacerbated the pressure on
return measures, which may be sustained for a long period of time.
This pressure rationalizes RenaissanceRe’s acquisition of Platinum
Underwriters Holdings, Ltd. in 2015. RenRe’s strategy to diversify
its core property catastrophe book of business is ongoing.
Factors that could return the negative outlooks to stable
include superior operating results coupled with strong
risk-adjusted capitalization over the long term. Factors that could
lead to a downgrade include outsized catastrophe or investment
losses, weak or strained risk-adjusted capitalization or continued
downward pressure on property catastrophe rates, which is currently
the organizations main line of business.
The following issue ratings have been affirmed with a negative
outlook:
RenaissanceRe Holdings Ltd.—-- “bbb” on $250 million
6.08% Series C perpetual preferred stock-- “bbb” on $275 million
5.375% Series E perpetual preferred stock
RenaissanceRe North American Holdings Inc. (guaranteed by
RenaissanceRe Holdings Ltd.)—-- “a-” on $250 million 5.75%
senior unsecured notes, due 2020
Platinum Underwriters Finance Inc. (guaranteed by
RenaissanceRe Holdings Ltd.) –-- “a-” on $250 million 7.5%
senior unsecured notes, due 2017
RenaissanceRe Finance Inc. (guaranteed by RenaissanceRe
Holdings Ltd.) –-- “a-” on $300 million 3.7% senior unsecured
notes, due 2025
The following indicative shelf issue ratings have been affirmed
with a negative outlook:
RenaissanceRe Holdings Ltd.—-- “a-” on senior unsecured--
“bbb+” on subordinated-- “bbb” on preferred stock
RenaissanceRe Capital Trust II—-- “bbb” on trust
preferred securities
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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A.M. BestSteven M. Chirico, CPAAssistant Vice
President+1 908 439 2200, ext.
5087steven.chirico@ambest.comorRobert
DeRoseVice President+1 908 439 2200, ext.
5453robert.derose@ambest.comorChristopher
SharkeyManager, Public Relations+1 908 439 2200, ext.
5159christopher.sharkey@ambest.comorJim
PeavyAssistant Vice President, Public Relations+1 908
439 2200, ext. 5644james.peavy@ambest.com
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