S&P Lowers Ratings on Hannover Re Group

Standard & Poor’s announced that has lowered its long-term counterparty credit and insurer financial strength ratings on Hannover Ruckversicherungs AG (Hannover Re), E+S Ruckversicherungs AG, International Insurance Co. of Hannover Ltd. (IICH), E+S Reinsurance (Ireland) Ltd., and Hannover Reinsurance (Ireland) Ltd.–all core entities of the German Hannover Re group–to double-’A’ from double-’A'-plus.

All of the operating units, except IICH which is undergoing a full review by S&P, have been removed from CreditWatch where they had been placed on Sept. 20, as a result of the group’s exposure to losses related to the WTC disaster and the likely adverse impact on capital. The outlook is stable.

“The rating actions reflect the Hannover Re group’s diminished financial flexibility, concerns about the quality of total adjusted capital, and a reduction in the group’s risk-based capitalization beyond Standard & Poor’s expectations that results from losses related to the terrorist attacks in New York. Positive rating factors are the group’s very strong global business position, strong management team, and strong earnings performance,” said the announcement.

S&P also noted that “Hannover Re’s operating performance has been consistently strong and significantly less volatile than that of its peers, with the group focusing on disciplined underwriting policies tied to specific combined ratios and ROE by line of business, and risk management practices. September 11-related losses will fully absorb the group’s 2001 pretax income, translating into a break-even result in 2001.”|”snp, lowers, ratings, on, hannover, re, group