AM Best Places Credit Ratings of Validus Reinsurance, Ltd. and Subsidiary Under Review With Developing Implications; Comments on Credit Ratings of American International Group, Inc. and Its Other Property/Casualty Subsidiaries
May 25 2023 - 5:31PM
Business Wire
AM Best has placed under review with developing
implications the Financial Strength Rating (FSR) of A (Excellent)
and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a”
(Excellent) of Validus Reinsurance, Ltd. (Validus Re) (Hamilton,
Bermuda) and Validus Reinsurance (Switzerland) Ltd. (Zurich,
Switzerland), a subsidiary of Validus Holdings, Ltd. (Validus)
(Hamilton, Bermuda) [NYSE:VR].
Concurrently, AM Best has commented that the Credit Ratings
(ratings) of the remaining members of American International Group,
Inc. (AIG) remain unchanged.
These rating actions follow the recently announced definitive
agreement whereby AIG will sell Validus Re and Validus, including
AlphaCat Managers Ltd. and the Talbot Treaty reinsurance business,
to RenaissanceRe Holdings Ltd. (RenaissanceRe) [NYSE: RNR] for
$2.99 billion, consisting of $2.74 billion in cash and $250 million
in RenaissanceRe common shares. AIG is also expected to receive all
capital in excess of $2.1 billion of shareholders’ equity of
Validus Re and achieve future capital synergies of approximately
$400 million from the recapture of reserves due to transferring the
Validus Re balance sheet to RenaissanceRe, which together, as of
Dec. 31, 2022, was over $1.5 billion. This brings the total
estimated transaction value to more than $4.5 billion.
The transaction is expected to close in fourth-quarter 2023,
subject to regulatory approvals and other customary closing
conditions. Subsequent to the closing, AIG expects to make
significant investments in RenaissanceRe’s DaVinci Reinsurance Ltd.
and Fontana Reinsurance Ltd. managed funds through AIG’s investment
portfolio.
The ratings will remain under review until the deal closes and
AM Best completes its evaluation of organizational changes and
strategic positioning within the new structure. The under review
status may be updated in the interim period if new facts and
circumstances present themselves.
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 Guide to Best's Credit Ratings. For information
on the proper use of Best’s Credit Ratings, Best’s Performance
Assessments, Best’s Preliminary Credit Assessments and AM Best
press releases, please view Guide to Proper Use of Best’s
Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
Copyright © 2023 by A.M. Best Rating
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Raymond Thomson, CPCU, ARe, ARM Associate Director
+1 908 439 2200, ext. 5621 raymond.thomson@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com
Erik Miller, CFA Director +1 908 439 2200, ext.
5187 erik.miller@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 439 2200, ext. 5098 al.slavin@ambest.com
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