A.M. Best Co. has placed under review with negative implications the financial strength rating (FSR) of ‘A+’ (Superior) and issuer credit ratings (ICR) of “aa-” of Bermuda-based Partner Reinsurance Company Ltd. and its affiliates. Best also placed under review with negative implications the ICR of “a-” and debt ratings of its parent, PartnerRe Ltd.
Best explained that it took the actions following PartnerRe’s recent pre-earnings release, “which provided estimates of losses related to flooding in Thailand and its outlook on fourth quarter 2011 financial results.”
The under review status reflects Best’s “concern with the aggregation of catastrophe losses that PartnerRe has experienced on an absolute and relative basis,” said the report; adding that “the accumulation of catastrophe losses experienced by PartnerRe in 2011 has strained average historical measures.”
The company will remain under review pending the completion of Best’s analysis of the its final 2011 earnings release and catastrophe losses “as well as market analysis of PartnerRe’s 2011 results relative to its peers. The analysis also will include a review of the company’s capital position, risk appetite and risk management capabilities.”
Best cited several factors that could result in a negative outlook or a downgrading of the ratings. They include: “unfavorable operating profitability relative to the market as a result of catastrophe losses. Additional factors that could place downward pressure on the ratings would be an altered view of PartnerRe’s risk management capability or a material decline in its risk-adjusted capital.
“Factors that could lead to a stable outlook would be evidence of PartnerRe’s long-term, consistently strong operating profitability and maintenance of strong risk-adjusted capital levels.”
For a complete listing of PartnerRe, Ltd. and its subsidiaries’ FSRs, ICRs and debt ratings, go to: www.ambest.com/press/012404partnerre.pdf.
Source: A.M. Best
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