Best’s News & Research Service - September 08, 2023 12:30 PM (EDT)
AM Best Affirms Credit Ratings of RenaissanceRe Holdings Ltd. and Its Main Subsidiaries
- September 08, 2023 12:30 PM (EDT)
Oldwick //BestWire// - AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa-” (Superior) of Renaissance Reinsurance Ltd. (RenaissanceRe), Renaissance Reinsurance U.S. Inc. (Maryland), RenaissanceRe Specialty U.S. Ltd., Renaissance Reinsurance of Europe Unlimited Company (Dublin, Ireland) and RenaissanceRe Europe AG (Zurich, Switzerland) (formally named Tokio Millennium Re AG). Additionally, AM Best has affirmed the Long-Term ICR of “a-” (Excellent) and the Long-Term Issue Credit Ratings (Long-Term IR) of RenaissanceRe Holdings Ltd. (RNR) [NYSE: RNR]. AM Best also has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a+” (Excellent) of DaVinci Reinsurance Ltd. (DaVinci) and the Long-Term ICR of “bbb+” (Good) of DaVinciRe Holdings Ltd. Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a+” (Excellent) of Vermeer Reinsurance Ltd. (Vermeer). The outlook of these Credit Ratings (ratings) is stable. All aforementioned companies are domiciled in Bermuda, unless otherwise specified. (See below for a detailed listing of the Long-Term IRs.)
The ratings of RenaissanceRe reflect the group’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, favorable business profile and very strong enterprise risk management (ERM).
AM Best’s assessment of RenaissanceRe’s overall balance sheet strength considers the positive impact of the financial flexibility provided by its ultimate parent, RNR, which typically maintains significant capital at the holding company level and is available to be down-streamed into its underwriting companies, as needed. RNR has consistently demonstrated its ability to raise capital through the public and private equity markets, as well as the public debt markets. RNR’s ability to attract and deploy capital during both favorable and challenging market cycles is an important consideration in AM Best’s assessment of the enterprise’s overall balance sheet strength and the individual balance sheet assessments of RNR’s operating companies.
RenaissanceRe’s ratings also benefit from the strength and depth of its management team and ability to deliver strong, long-term profitability over the course of the market cycle. While RenaissanceRe remains a leader in the property catastrophe reinsurance segment, the company has gained significant traction in casualty and specialty lines, which now comprise more than half of its underwriting premiums. RenaissanceRe is also widely recognized for its leadership in ERM, modeling capabilities and as a pioneer in third-party capital management, where it maintains a strong reputation in evaluating risk and effectively deploying capital. As a result, it has attracted capital from outside investors to form several successful joint ventures, including DaVinci, Top Layer Reinsurance Ltd., Vermeer, and most recently, Fontana Holdings L.P., its first third-party reinsurance capital-backed joint venture focused on casualty and specialty risks.
Partially offsetting these strengths is RenaissanceRe’s exposure to high severity losses associated with global catastrophe events, although the company’s underwriting results and overall operating performance has grown increasingly less volatile, as diversifying business lines have mitigated the impact of catastrophe losses. Looking forward, RenaissanceRe appears well-positioned to benefit from ongoing broad-based pricing improvement in several of its key product lines, particularly in property catastrophe reinsurance, which saw material rate improvement and tighter terms and conditions at each of the key 2023 renewal periods.
The ratings of DaVinci reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and very strong ERM. DaVinci’s profile is enhanced due to its affiliation to RenaissanceRe.
The ratings of Vermeer reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and very strong ERM.
The following Long-Term IRs have affirmed with stable outlooks:
RenaissanceRe Holdings Ltd.
— ¬“bbb” (Good) on $250 million 5.75% non-cumulative fixed rate Series F perpetual preferred stock
RenaissanceRe Finance Inc. (guaranteed by RenaissanceRe Holdings Ltd.)
— “a-” (Excellent) on $300 million 3.7% senior unsecured notes, due 2025
— “a-” (Excellent) on $300 million 3.45% senior unsecured notes, due 2027
The following indicative Long-Term IRs under the shelf registration have been affirmed with stable outlooks:
RenaissanceRe Holdings Ltd.
— “a-” (Excellent) on senior unsecured
— “bbb+” (Good) on subordinated
— “bbb” (Good) on preferred stock
RenaissanceRe Capital Trust II
— “bbb” (Good) on trust preferred securities
This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.