A.M. Best Affirms RenRe, Upgrades DaVinci

May 25, 2012

A.M. Best Co. has affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit ratings (ICR) of “aa-” of Renaissance Reinsurance Ltd. (RenRe) and Renaissance Reinsurance of Europe (Dublin, Ireland).

A.M. Best also has affirmed the ICR of “a-” and all debt ratings of RenaissanceRe Holdings Ltd. (RenaissanceRe), and the FSR of A (Excellent) and ICR of “a” of Glencoe Insurance Ltd. (Bermuda).

Concurrently, A.M. Best has affirmed the FSR of A (Excellent) and upgraded the ICR to “a+” from “a” of DaVinci Reinsurance Ltd. (DaVinci) and upgraded the ICR to “bbb+” from “bbb” of DaVinci Re Holdings Ltd. The outlook for all ratings is stable.

A statement issued said, “The rating actions reflect RenRe’s superior level of risk-based capitalization, the strength and depth of its management team and the company’s ability to deliver strong returns over the course of the cycle. In addition, the company is widely recognized as a leader in enterprise risk management.

“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 companies to form several successful joint ventures including DaVinci and Top Layer Reinsurance Ltd.

“The upgrading of DaVinci’s ICR of reflects its solid operating performance over the last several years and maintenance of strong risk-adjusted capital. While 2011 was a challenging year for DaVinci as well as the rest of the reinsurance sector due to the numerous global catastrophes, losses were well within expectations. DaVinci’s profile is enhanced due to its affiliation with RenRe.

“Offsetting these strengths is RenRe’s exposure to high severity losses associated with catastrophic events on a worldwide basis, as is the case with the 2011 catastrophes. However, losses were within stated risk tolerances and A.M. Best’s expectations. RenRe and DaVinci were well-positioned going into the January 2012 renewals.

“For the rated operating companies above, factors that could lead to a revision of the outlook to positive or an upgrading of the ratings include continued, long-term favorable operating profitability relative to peers and maintenance of strong risk-adjusted capital levels.

“Factors that could cause a revision in the outlook to negative or a downgrading of the ratings include unfavorable operating profitability trends, outsized catastrophe or investment losses relative to peers and/or A.M. Best’s expectations, a decline in the level of parental or organizational commitment, significant adverse loss reserve development and/or a material decline in risk adjusted capital.”

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