Agency Places PartnerRe Under Review
Ratings agency A.M. Best Co. has placed under review with negative implications the financial strength rating [FSR] of A+ [Superior] and issuer credit ratings [ICR] of “aa-” of Bermuda’s Partner Reinsurance Company Ltd. and its affiliates.
A.M. Best also has placed under review with negative implications the ICR of “a-” and debt ratings of its parent, PartnerRe Ltd. This rating action follows PartnerRe’s recent pre-earnings release, which provided estimates of losses related to flooding in Thailand and its outlook on fourth quarter 2011 financial results.
A Best analyst said: “The under review status reflects A.M. Best’s concern with the aggregation of catastrophe losses that PartnerRe has experienced on an absolute and relative basis. The accumulation of catastrophe losses experienced by PartnerRe in 2011 has strained average historical measures.
“PartnerRe will remain under review pending the completion of A.M. Best’s analysis of the company’s final 2011 earnings release and catastrophe losses as well as market analysis of PartnerRe’s 2011 results relative to its peers. The analysis also will include a review of the company’s capital position, risk appetite and risk management capabilities.”
Factors that could result in a negative outlook or a downgrading of the ratings include unfavorable operating profitability relative to the market as a result of catastrophe losses. Additional factors that could place downward pressure on the ratings would be an altered view of PartnerRe’s risk management capability or a material decline in its risk-adjusted capital. Factors that could lead to a stable outlook would be evidence of PartnerRe’s long-term, consistently strong operating profitability and maintenance of strong risk-adjusted capital levels.
Based in Bermuda, PartnerRe Ltd. was formed in 1993, raising nearly $1 billion in an initial public offering to capitalise on the void in catastrophe reinsurance capacity following Hurricane Andrew and the concurrent difficulties faced by Lloyds of London.
While beginning as a pure property reinsurer, the company has become a diversified property-casualty [P&C] and life reinsurer over the years, covering catastrophe, automobile, agricultural, credit and surety, marine, space and aviation, miscellaneous casualty, and life/health risks.
Since 1997, the company has been a leading international reinsurance company that writes multi-line reinsurance on a pro-rata as well as excess of loss basis and offers both treaty and facultative contracts.
