A.M. Best Places the Ratings of RenaissanceRe Holdings Ltd. and Its Affiliates Under Review with Negative Implications

OLDWICK, N.J.--()--A.M. Best placed under review with negative implications 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 has placed under review with negative implications the ICR of "a-" and all debt ratings of RenaissanceRe Holdings Ltd. (RenaissanceRe) [NYSE: RNR] and the FSR of A (Excellent) and the ICR of "a" of RenaissanceRe Specialty Risks Ltd. In addition, A.M. Best has placed under review with negative implications the FSR of A (Excellent) and the ICR of "a" of RenaissanceRe Specialty U.S. Ltd. (RenRe Specialty US). Concurrently, A.M. Best has placed under review with negative implications the FSR of A (Excellent) and the ICR of "a+" of DaVinci Reinsurance Ltd. (DaVinci) and the ICR of "bbb+" of DaVinci Re Holdings Ltd. All aforementioned companies are domiciled in Bermuda, unless otherwise specified. (See below for a detailed listing of the debt ratings.)

The under review status is based on the recent announcement that RenaissanceRe has entered into a definitive agreement to purchase Platinum Underwriters Holdings Ltd. (Platinum) (Bermuda). This transaction would give RenaissanceRe additional scale and help broaden its product offering. However, this transaction also represents a significant commitment on the part of RenaissanceRe to continue its move into casualty business, which is outside of the organization’s core competency of property catastrophe reinsurance.

The under review status will be removed once the deal closes and A.M. Best completes its analysis. Factors that could result in negative rating actions include weakened risk-adjusted capitalization levels as a result of the acquisition, the perception that prospective operating results will be below that of the organization’s historical run rate, the lack of retention of key personnel or details of the transaction that are not known to A.M. Best at this time. Factors that could lead to rating affirmations are strong risk-adjusted capital levels coupled with a well-thought out business plan that demonstrates strong and stable operating performances throughout the organization going forward. In addition, A.M. Best is interested in understanding the tactical execution of the business plan as it relates to the combined organization.

The following debt ratings have been placed under review with negative implications:

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 America Holdings Inc.—(guaranteed by RenaissanceRe Holdings Ltd.) 
-- "a-" on $250 million 5.75% senior unsecured notes, due 2020

The following indicative shelf debt ratings have been placed under review with negative implications:

RenaissanceRe Holdings Ltd.—
-- "a-" on senior unsecured
-- "bbb+" on subordinated
-- "bbb" on preferred stock

RenaissanceRe Capital Trust II—
-- "bbb" on trust preferred securities

The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:

  • Catastrophe Analysis in A.M. Best Ratings
  • Rating Members of Insurance Groups
  • Risk Management and the Rating Process for Insurance Companies
  • Understanding Universal BCAR
  • Insurance Holding Company and Debt Ratings

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 visit Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contacts

A.M. Best Company
Greg Reisner, 908-439-2200, ext. 5224
Managing Senior Financial Analyst
greg.reisner@ambest.com
or
Peter Dickey, 908-439-2200, ext. 5053
Assistant Vice President
peter.dickey@ambest.com
or
Christopher Sharkey, 908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Contacts

A.M. Best Company
Greg Reisner, 908-439-2200, ext. 5224
Managing Senior Financial Analyst
greg.reisner@ambest.com
or
Peter Dickey, 908-439-2200, ext. 5053
Assistant Vice President
peter.dickey@ambest.com
or
Christopher Sharkey, 908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com