AM Best Downgrades PartnerRe After EXOR Deal
Following the news that the AXIS deal was cancelled and EXOR will buy PartnerRe, A.M. Best has downgraded the financial strength rating to A [Excellent] from A+ [Superior] and the issuer credit ratings [ICR] to “a+” from “aa-” of Bermuda-based PartnerRe and its affiliates.
“A.M. Best also has downgraded the ICR to “bbb+” from “a-” and the issue ratings of PartnerRe’s parent, PartnerRe Ltd. This rating action follows the announcement that PartnerRe Ltd and AXIS Capital Holdings Limited have terminated a definitive amalgamation agreement and that PartnerRe Ltd has entered into a definitive agreement to be acquired by Italian investment firm EXOR, S.p.A. The ratings remain under review with negative implications,” the ratings agency said.
“The rating action is based on existing A.M. Best concerns regarding PartnerRe’s concentration in reinsurance and lack of a diversified product platform, in particular, the ability to provide both primary and reinsurance solutions. The proposed merger with AXIS would have begun to address these issues and with that transaction terminated these concerns are brought back to the forefront.
“Additionally, A.M. Best is concerned that any such diversification initiatives at PartnerRe have been delayed because of the now terminated merger agreement with AXIS. These concerns are magnified given the current challenging reinsurance market conditions.
“The under review status remains due to remaining uncertainty regarding senior leadership at PartnerRe, particularly the role of CEO and additional information required regarding EXOR’s plans for PartnerRe. The under review status will be removed after the closing of the EXOR–PartnerRe transaction.”
