Best Affirms Swiss Re and Sub’s ‘A+’ Ratings; Outlook Stable

January 24, 2013

A.M. Best Co. has affirmed the financial strength rating (FSR) of ‘A+’ (Superior) and issuer credit ratings (ICR) of “aa-” of Swiss Reinsurance Company Ltd and its subsidiaries. Best also affirmed all debt ratings of Swiss Re and its subsidiaries. The outlook for all of the ratings is stable.

“Swiss Re continues to maintain a dominant position in its chosen markets and benefits from a global franchise with a large selection of products along with a worldwide distribution system,” Best explained. “The company has established sound client relationships with some of the leading companies in the world while offering larger lines and capacity. Swiss Re’s market presence is fully supported by its superior risk-based capitalization and robust risk management capabilities.”

Best noted that Swiss Re’s operating results through the first nine months of 2012 for the property/casualty reinsurance business segment “reflected the low level of catastrophes with a combined ratio of 78.1 percent, while the primary insurance segment, Swiss Re Corporate Solutions Ltd, performed better than breakeven with a combined ratio of 94.0 percent.

“The life/health reinsurance segment performed well with a benefit ratio of 75.8 percent. During the fourth quarter of 2012, Swiss Re reported a Hurricane Sandy net loss estimate of $900 million. Despite this loss, the company is anticipated to report profitable results for the year ending December 31, 2012.”

The ratings report pointed out that “over the past several years, Swiss Re has consistently maintained superior levels of risk-based capitalization, benefitting from its diverse books of business and efficient capital management program. Additionally, Swiss Re maintains minimal levels of exposure to sovereign risk emanating from Europe’s more troubled economies, along with minimal exposure to European banks.”

Best said it “considers Swiss Re’s risk management program to be very effective. The organization dedicates a significant level of personnel on a worldwide basis to monitor risk in all operating segments as part of its formal risk management program. Swiss Re also makes extensive use of its proprietary capital model to analyze various stress scenarios on its entire operation as well as on individual business segments.

“Positive rating actions could occur if over the next several years, Swiss Re’s operating performance and risk-adjusted capitalization significantly and consistently exceed its peer group of global reinsurers.

“Negative rating actions could occur if Swiss Re’s operating performance and risk-adjusted capitalization consistently fall below A.M. Best expectations for its current rating level by a significant margin for a prolonged period.

A complete listing of Swiss Re and its subsidiaries’ FSRs, ICRs and debt ratings, is available.

Source: A.M. Best

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