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AM Best has assigned a Financial Strength Rating of A (Excellent)
and a Long-Term Issuer Credit Rating of “a+” to Vermeer Reinsurance Ltd.
(Vermeer) (Bermuda). The outlook assigned to these Credit Ratings
(ratings) is stable.
The ratings reflect Vermeer’s balance sheet strength, which A.M. Best
categorizes as very strong, as well as its adequate operating
performance, neutral business profile and very strong enterprise risk
Vermeer is a joint venture between RenaissanceRe Holdings Ltd.
(RenaissanceRe) [NYSE:RNR] and Dutch pension fund manager PGGM to
provide new capacity predominantly for risk-remote layers in the U.S.
property catastrophe market.
PGGM is a leading Dutch pension fund service provider with € 215 billion
of assets under management. PGGM has been investing in insurance and CAT
bonds since 2006 and is currently one of the largest end-investors in
Vermeer will initially be capitalized with $600 million of funding from
PGGM, with the option for another $400 million investment to pursue
growth opportunities in 2019. Vermeer will be managed solely by
Renaissance Underwriting Managers, Ltd. (RUM) and is expected to be
consolidated into RenaissanceRe’s financial statements. In addition to
board control, RenaissanceRe owns 100% of the voting shares, and RUM
will manage Vermeer’s business including underwriting, pricing, risk
selection, reserves, investments, claims, etc. Vermeer’s underwriting
portfolio will be aligned with RenaissanceRe’s, as RenaissanceRe
participates on every risk alongside Vermeer.
The ratings assigned to Vermeer also reflect the strength and depth of
RenaissanceRe’s management team and the ability of the company to
deliver strong long-term profitability over the course of the
(re)insurance cycle. RenaissanceRe is recognized widely for its
leadership in ERM and as a pioneer in third-party capital management.
RenaissanceRe remains a leader in the property catastrophe market, and
maintains a strong reputation in evaluating risk and effectively
deploying capital, and as a result, Vermeer should benefit from this
Partially offsetting these strengths is Vermeer’s start-up status, its
ability to be accepted in the market and its expected exposure to high
severity losses associated with catastrophe events. In addition, the
global reinsurance market, and specifically the property catastrophe
segment, has experienced overcapacity and pricing pressures over the
past few years that in turn has placed pressure on overall returns.
This press release relates to Credit Ratings that have been published
on AM 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 AM Best’s Recent
Rating Activity web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view Understanding
Best’s Credit Ratings. For information on the proper media
use of Best’s Credit Ratings and AM Best press releases, please view Guide
for Media - Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.
AM Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit www.ambest.com
for more information.
Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181218005501/en/
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