AM Best

A.M. Best Affirms Credit Ratings of Everest Re Group Ltd. and its Subsidiaries


Scott Mangan
Senior Financial Analyst
+1 908 439 2200, ext. 5593

Steven M. Chirico, CPA
+1 908 439 2200, ext. 5087

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644


OLDWICK - FEBRUARY 10, 2017 02:29 PM (EST)
A.M. Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa-” of Everest Reinsurance (Bermuda) Ltd. (Bermuda) and its reinsurance and insurance affiliates (collectively Everest Re). Concurrently, A.M. Best has affirmed the Long-Term ICRs of “a-” of Everest Re Group, Ltd. (Bermuda) [NYSE: RE] and Everest Reinsurance Holdings, Inc. (Delaware). Additionally, A.M. Best has affirmed the Long-Term Issue Credit Ratings (Long-Term IR) of Everest Re Group, Ltd., Everest Reinsurance Holdings, Inc. and Everest Re Capital Trust III. The outlook of all these Credit Ratings (ratings) is stable. (See below for a detailed listing of the companies and ratings.)

The ratings reflect Everest Re’s superior risk-adjusted capitalization, financial flexibility and operating performance, as well as the group’s market profile as a leading reinsurer. Additionally, Everest Re also benefits from a strong enterprise risk management (ERM) framework and diversified book of business.

Everest Re maintains favorable financial leverage and coverage metrics, which along with its ability to raise and manage third-party capital gives the group the capability to navigate the current challenging market environment. Everest Re manages the Mt. Logan Re sidecar and Kilimanjaro Re cat bonds, which has allowed the group to provide additional market capacity and generate fee income while still maintaining a risk profile in line with its risk-adjusted capitalization. A.M. Best believes that Everest Re maintains ERM capabilities and has established a risk management framework that effectively identifies, measures and monitors existing and emerging risks across its respective businesses and enables the efficient allocation of capital.

Everest Re has produced relatively strong overall earnings driven by favorable underwriting results. Underwriting results in recent years have reflected Everest Re’s low-cost operating structure and relatively benign catastrophe activity. Due to its diversified product offering and geographic spread, A.M. Best believes Everest Re is well-positioned within its business sector to continue to perform in line with its peer group despite the current competitive reinsurance market environment.

Offsetting these positive rating factors is the organization’s exposure to large catastrophe losses. As part of its catastrophe management process, Everest Re utilizes catastrophe modeling and establishes risk limits to control catastrophic exposures on a probable maximum loss and aggregate basis, although catastrophe losses could significantly impact earnings in any given year.

Rating factors that could lead to a positive outlook or rating upgrade include the continuation of long-term, consistently strong operating profitability relative to peers and maintaining strong risk-adjusted capital levels. Rating factors that could lead to negative rating actions include deteriorating trends in operating profitability, outsized catastrophe or investment losses relative to peers or A.M. Best’s expectations, significant adverse loss reserve development or a material decline in risk-adjusted capital.

The FSR of A+ (Superior) and Long-Term ICRs of “aa-” have been affirmed for Everest Reinsurance (Bermuda) Ltd. and its following reinsurance and insurance subsidiaries:

  • Everest Reinsurance Company

  • Everest International Reinsurance, Ltd.

  • Everest Reinsurance Company (Ireland), Designated Activity Company

  • Everest National Insurance Company

  • Everest Indemnity Insurance Company

  • Everest Security Insurance Company

  • Everest Insurance Company of Canada

  • Everest International Assurance Ltd.

The following Long-Term IRs have been affirmed:

Everest Reinsurance Holdings, Inc.

— “a-” on $400 million 4.868% fixed senior unsecured notes, due 2044

— “bbb” on $400 million 6.6% fixed-to-floating long-term junior subordinated notes, due 2067

The following indicative Long-Term IRs have been affirmed under the shelf registration:

Everest Re Group, Ltd.

— “a-” on senior unsecured debt

— “bbb+” on subordinated debt

— “bbb” on preferred stock

Everest Reinsurance Holdings, Inc.

— “a-” on senior unsecured debt

— “bbb+” on subordinated debt

Everest Re Capital Trust III—(guaranteed by Everest Reinsurance Holdings, Inc.)

— “bbb+” on trust preferred securities

This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.

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