AM Best removes ‘under review’ rating of PartnerRe
AM Best has removed from under review with negative implications and affirmed the financial strength rating (FSR) of A (Excellent) PartnerRe and its affiliates.
The outlook assigned to the rating is stable.
In March 2016, PartnerRe and EXOR concluded a merger agreement originally announced in August of 2015. The current rating action reflects the resolution of uncertainty around PartnerRe’s management and business plan under EXOR ownership.
Additionally, the ratings reflect PartnerRe’s strong risk-adjusted capitalisation, as measured by Best’s Capital Adequecy Ratio (BCAR), and its well-regarded global business profile.
PartnerRe maintains a highly diversified book of reinsurance business across both non-life and life lines of business, as well as a balanced geographic spread of risk.
AM Best said it still has concerns about PartnerRe’s focus on reinsurance due to the very challenging market conditions.
Under EXOR ownership, AM Best believes that PartnerRe’s financial flexibility will be maintained as it still has access to the capital markets on a stand-alone basis, as well as potentially through EXOR, which is a publicly traded company in Italy.
Rating factors that could lead to a positive outlook or rating upgrade would be improvement in distribution platforms, long-term consistently strong operating profitability and continued maintenance of excellent risk-adjusted capital levels through various market conditions.
Rating factors that could lead to a negative outlook or a downgrade, according to AM Best, include unfavourable operating results, outsized insurance or investment losses, and a significant decline in risk-adjusted capital that would not be supportive of the current rating levels.
