Best Affirms PartnerRe, Operating Subs Ratings; Outlook Stable

June 13, 2014

A.M. Best has affirmed the financial strength rating (FSR) of ‘A+’ (Superior) and the issuer credit ratings (ICR) of “aa-” of Bermuda-based Partner Reinsurance Company Ltd. and its affiliates, as well as the ICR of “a-” and debt ratings of PartnerRe’s parent, PartnerRe Ltd. The outlook for all ratings is stable.

The ratings and outlook for PartnerRe Ltd. and its subsidiaries “reflect their strong risk-adjusted capitalization, strong business profile as a truly global reinsurance organization and solid 2013 operating performance,” Best said. “PartnerRe Ltd. has the capability, expertise and access to various global geographies so that it can write a diverse book of business to help drive solid long-term results.”

As a partial offsetting factor Best cited “PartnerRe Ltd.’s limited primary capability. Given the current market dynamics the reinsurance sector faces significant pricing pressure, third party capital taking a larger share of property catastrophe business and primary companies retaining more business; thus, a reinsurance organization without significant dual capabilities may be somewhat disadvantaged to withstand these current headwinds.”

Best’s report also indicated that it “considers the reinsurance industry to be at an inflection point. These current market trends and PartnerRe Ltd.’s strategy to successfully manage through them will continue to be monitored by A.M. Best.”

In conclusion Best said: “Factors that could result in a downgrading of the organization’s ratings and/or a revision of the outlook to negative include unfavorable operating results relative to the market or an altered view of its enterprise risk management capability and/or a material decline in risk-adjusted capital.

“Factors that could lead to an upgrading of the ratings and/or a revision of the outlook to positive would be consistent, long-term operating profitability coupled with maintenance of strong risk-adjusted capital.

Best summarized the ratings affected as follows:
The FSR of ‘A+’ (Superior) and the ICRs of “aa-” have been affirmed for Partner Reinsurance Company Ltd. and its following affiliates:
- Partner Reinsurance Company of the U.S.
-PartnerRe Insurance Company of New York
- PartnerRe Ireland Insurance Limited
- Partner Reinsurance Europe SE
- PartnerRe America Insurance Company

The following debt ratings have been affirmed:
PartnerRe Ltd.—
- “bbb” on $230 million 6.5 percent preferred shares, Series D
- “bbb” on $325 million 7.25 percent preferred shares, Series E
- “bbb” on $250 million 5.875 percent preferred shares, Series F

PartnerRe Finance A LLC—
- “a-” on $250 million 6.875 percent senior unsecured notes, due 2018

PartnerRe Finance B LLC—
- “a-” on $500 million 5.5 percent senior unsecured notes, due 2020

PartnerRe Financial II, Inc.—
- “bbb” on $250 million 6.44 percent junior subordinated capital efficient notes, due 2066

The following indicative ratings under the shelf registration have been affirmed:
PartnerRe Ltd.—
- “a-” on senior unsecured debt
- “bbb+” on subordinated debt
- “bbb” on preferred stock

PartnerRe Financial II, Inc. (guaranteed by PartnerRe Ltd.)—

- “a-” on senior unsecured debt
- “bbb+” on subordinated debt
- “bbb” on preferred stock

PartnerRe Capital Trust II and III (guaranteed by PartnerRe Ltd.)—
- “bbb+” on trust preferred securities

Source: A.M. Best

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