AUGUST 19, 2016 12:15 PM (EDT)
A.M. Best Affirms Ratings of RenaissanceRe Holdings Ltd. and Its Subsidiaries
|Steven M. Chirico, CPA |
Assistant Vice President
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Manager, Public Relations
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Assistant Vice President, Public Relations
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FOR IMMEDIATE RELEASE
OLDWICK - AUGUST 19, 2016 12:15 PM (EDT)
A.M. Best has affirmed the financial strength rating (FSR) of A+ (Superior) and the issuer credit ratings (ICR) of “aa-” of Renaissance Reinsurance Ltd. (RenRe) and Renaissance Reinsurance of Europe (Dublin, Ireland). A.M. Best also affirmed the ICR of “a-” and all issue ratings of RenaissanceRe Holdings Ltd. (RenaissanceRe) [NYSE:RNR]. The outlook for each of these ratings remains negative.
Additionally, A.M. Best has affirmed the FSR of A (Excellent) and the ICR of “a+” of DaVinci Reinsurance Ltd. (DaVinci), as well as the ICR of “bbb+” of DaVinci Re Holdings Ltd. The outlook for the FSR of DaVinci remains stable, while the outlook for the ICRs of DaVinci and DaVinci Re Holdings Ltd. remains negative.
Concurrently, A. M. Best has affirmed the FSR of A (Excellent) and the ICR of “a” of RenaissanceRe Specialty Risks Ltd. (RenRe Specialty Risks). The outlook for each rating remains stable. A.M. Best also has upgraded the ICR of Renaissance Reinsurance US Inc (RenRe US) to “a+” from “a” and affirmed the FSR of A (Excellent). The outlook for the ICR is revised to stable from positive while the outlook for the FSR remains stable. Lastly, A.M. Best has affirmed the FSR of A (Excellent) and the ICR of “a” of RenaissanceRe Specialty US Ltd (RenRe Specialty US Ltd). The outlook for each rating remains stable. All of the aforementioned companies are domiciled in Bermuda unless otherwise specified (See below for a detailed listing of the issue ratings.)
The rating actions reflect RenRe’s superior level of risk-adjusted capitalization, the strength and depth of its management team and the ability of the company to deliver strong long-term profitability over the course of the insurance cycle. The company is widely recognized for its thoughtful leadership in enterprise risk management and as a pioneer in third-party capital management. In that regard, RenRe maintains its superior market reputation as a leader in state-of-the-art property catastrophe modeling and risk optimization, which has attracted capital from outside investors to form several successful joint ventures, including DaVinci and Top Layer Reinsurance Ltd.
The ratings of DaVinci recognize its solid operating performance over the past several years and the maintenance of its strong risk-adjusted capitalization. DaVinci’s profile is enhanced due to its affiliation with RenRe.
The ratings of RenRe Specialty Risks, RenRe US and RenRe Specialty US Ltd. acknowledge their strong risk-adjusted capitalization, sound business plans and strategic positioning for writing casualty specialty risks. The ratings are enhanced based on implicit and explicit support. In addition, the aforementioned companies’ profiles are enhanced due to their affiliation and branding as RenRe companies.
Offsetting these strengths is RenRe’s exposure to high severity losses associated with catastrophic events. The global reinsurance market in general, and specifically the property catastrophe segment, has been experiencing overcapacity and resulting price pressures on rates that have pressured historically high return measures. The negative outlooks on the ICRs of RenRe and DaVinci reflect these adverse market conditions. The pricing pressure coupled with the flow of alternative capital and increased retentions of primary companies have exacerbated the pressure on return measures, which may be sustained for a long period of time. This pressure rationalizes RenaissanceRe’s acquisition of Platinum Underwriters Holdings, Ltd. in 2015. RenRe’s strategy to diversify its core property catastrophe book of business is ongoing.
Factors that could return the negative outlooks to stable include superior operating results coupled with strong risk-adjusted capitalization over the long term. Factors that could lead to a downgrade include outsized catastrophe or investment losses, weak or strained risk-adjusted capitalization or continued downward pressure on property catastrophe rates, which is currently the organizations main line of business.
The following issue ratings have been affirmed with a negative outlook:
RenaissanceRe Holdings Ltd.—
— “bbb” on $250 million 6.08% Series C perpetual preferred stock
— “bbb” on $275 million 5.375% Series E perpetual preferred stock
RenaissanceRe North American Holdings Inc. (guaranteed by RenaissanceRe Holdings Ltd.)—
— “a-” on $250 million 5.75% senior unsecured notes, due 2020
Platinum Underwriters Finance Inc. (guaranteed by RenaissanceRe Holdings Ltd.) –
— “a-” on $250 million 7.5% senior unsecured notes, due 2017
RenaissanceRe Finance Inc. (guaranteed by RenaissanceRe Holdings Ltd.) –
— “a-” on $300 million 3.7% senior unsecured notes, due 2025
The following indicative shelf issue ratings have been affirmed with a negative outlook:
RenaissanceRe Holdings Ltd.—
— “a-” on senior unsecured
— “bbb+” on subordinated
— “bbb” on preferred stock
RenaissanceRe Capital Trust II—
— “bbb” on trust preferred securities
This press release relates to rating(s) 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.
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