Best Affirms RenaissanceRe Group Ratings
Ratings agency A.M. Best Co. has affirmed the various ratings of Bermuda-domiciled RenaissanceRe Holdings Ltd. and its subsidiaries which provide reinsurance and insurance coverages and related services in the United States and internationally.
A.M. Best affirmed the financial strength rating [FSR] of A+ [Superior] and issuer credit ratings [ICR] of “aa-” of domiciled Renaissance Reinsurance Ltd. and Renaissance Reinsurance of Europe.
A.M. Best also has affirmed the ICR of “a-” and all debt ratings of RenaissanceRe Holdings Ltd. , and the FSR of A [Excellent] and ICRs of “a” of RenaissanceRe Specialty Risks Ltd.
Concurrently, A.M. Best has affirmed the FSR of A (Excellent) and the ICR of “a+” of DaVinci Reinsurance Ltd. as well as the ICR of “bbb+” of DaVinci Re Holdings Ltd.
In addition, A.M. Best has assigned an FSR of A [Excellent] and an ICR of “a” to RenaissanceRe Specialty U.S. Ltd.
The outlook for all ratings is stable.
“The rating actions reflect RenRe’s superior level of risk-based capitalization, the strength and depth of its management team and the ability of the company to deliver strong long-term profitability over the course of the insurance cycle,” said the ratings agency in a statement issued this week [June 11]. “The company is widely recognized as a thought and practice leader in enterprise risk management (ERM). In that regard, 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 investors to form several successful joint ventures including DaVinci and Top Layer Reinsurance Ltd.
“The ratings of DaVinci recognize its solid operating performance over the last several years and the maintenance of its strong risk-adjusted capitalization. DaVinci’s profile is enhanced due to its affiliation with RenRe.”
Best said the ratings assigned to RenRe Specialty US acknowledge its strong risk-adjusted capitalization, sound business plans and strategic business positioning for writing specialty risks.
“The ratings are enhanced based on explicit support including substantial internal reinsurance agreements,” said the Best statement. “In addition, RenRe Specialty US’ profile is enhanced due to its affiliation and branding as a RenRe company, and it is expected that it will be risk-managed in a similar fashion.”
Best analysts said offsetting these strengths is that as an organisation, RenRe is exposed to high severity losses associated with catastrophic events on a worldwide basis.
“However, losses have historically been within stated risk tolerances and A.M. Best’s expectations,” said the ratings agency.
Best said factors that could lead to a revision of the outlook to positive or an upgrading of the companies’ 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 of 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 expectation that may result in an alternate view of ERM, a decline in the level of parental or organizational commitment, significant adverse loss reserve development and/or a material decline in risk-adjusted capitalization.
The following debt ratings have been affirmed:
RenaissanceRe Holdings Ltd.—
“bbb” on $250 million 6.08% Series C perpetual preferred stock;
“bbb” on $300 million 6.6% Series D perpetual preferred stock;
“bbb” on $275 million 5.375% Series E perpetual preferred stock
RenaissanceRe North America Holdings Inc.—[guaranteed by RenaissanceRe Holdings Ltd.]
“a-” on $250 million 5.75% senior unsecured notes, due 2020
The following indicative shelf debt ratings have been affirmed:
RenaissanceRe Holdings Ltd.—
“a-” on senior unsecured
“bbb+” on subordinated
“bbb” on preferred stock
RenaissanceRe Capital Trust II—
– “bbb” on trust preferred securities
