Business & Finance
Thu, January 26, 2012
OLDWICK, N.J.--([ BUSINESS WIRE ])--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 aaa-a of Partner Reinsurance Company Ltd. (Hamilton, Bermuda) and its affiliates. A.M. Best also has placed under review with negative implications the ICR of aa-a and debt ratings ofits parent, PartnerRe Ltd. (PartnerRe) (Hamilton, Bermuda) (NYSE: PRE). This rating action follows PartnerReas recent pre-earnings release, which provided estimates of losses related to flooding in Thailand and its outlook on fourth quarter 2011 financial results. (See link below for a detailed listing of the companies and ratings.)
"Risk Management and the Rating Process for Insurance Companies"
The under review status reflects A.M. Bestas concern with the aggregation of catastrophe losses that PartnerRe has experienced on an absolute and relative basis. The accumulation of catastrophe losses experienced by PartnerRe in 2011 has strained average historical measures.
PartnerRe will remain under review pending the completion of A.M. Bestas analysis of the companyas final 2011 earnings release and catastrophe losses as well as market analysis of PartnerReas 2011 results relative to its peers. The analysis also will include a review of the companyas capital position, risk appetite and risk management capabilities
Factors that could result in a negative outlook or a downgrading of the ratings 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 PartnerReas risk management capability or a material decline in its risk-adjusted capital. Factors that could lead to a stable outlook would be evidence of PartnerReas long-term, consistently strong operating profitability and maintenance of strong risk-adjusted capital levels.
For a complete listing of PartnerRe, Ltd. and its subsidiariesa FSRs, ICRs and debt ratings, please visit [ www.ambest.com/press/012404partnerre.pdf ].
The principal methodology used in determining these ratings is [ Bestas Credit Rating Methodology -- Global Life and Non-Life Insurance Edition ], which provides a comprehensive explanation of A.M. Bestas rating process and highlights the different rating criteria employed. Additional key criteria utilized include: aRisk Management and the Rating Process for Insurance Companiesa; aUnderstanding Universal BCARa; aCatastrophe Analysis in A.M. Best Ratingsa; aRating Members of Insurance Groupsa; and aA.M. Bestas Ratings & the Treatment of Debt.a Methodologies can be found at [ www.ambest.com/ratings/methodology ].
Founded in 1899, A.M. Best Company is the worldas oldest and most authoritative insurance rating and information source. For more information, visit [ www.ambest.com ].
Copyright 2012 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.
