AM Best Affirms Credit Ratings of Swiss Reinsurance Company Ltd and Rated Affiliates

LONDON--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “aa” (Superior) of Swiss Reinsurance Company Ltd (Switzerland) and its rated operating affiliates. The outlook of the Long-Term ICR is negative, while the outlook of the FSR is stable. At the same time, AM Best has affirmed the Long-Term Issue Credit Ratings (Long-Term IRs) on the debt and the indicative Long-Term IRs on securities available under Swiss Reinsurance Company Ltd’s debt issuance programme. (See below for a detailed listing of the companies and ratings).

These Credit Ratings (ratings) reflect AM Best’s assessment of the rating fundamentals of the consolidated Swiss Re Ltd (Swiss Re) group, namely its balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, very favourable business profile and very strong enterprise risk management.

The negative outlook on the Long-Term ICR reflects pressure on Swiss Re’s operating performance assessment, following non-life underwriting losses in recent periods, partly driven by the casualty book of business. Actions implemented by the group to improve the performance of its portfolio resulted in stronger underlying profitability in 2020; however, claims related to the COVID-19 pandemic led to in an overall net loss for the group.

AM Best expects higher pricing in the reinsurance market and remedial actions taken by Swiss Re, including de-risking in its U.S. casualty portfolio and reducing exposure to low-attaching property aggregate treaties, to support prospective performance. In addition, the group possesses strong asset management capabilities, which help it navigate the prevailing low interest rate environment and financial market volatility. However, should further improvement in underlying performance fail to materialise in the short-to-medium term, a negative rating action on the Long-Term ICR is likely.

Swiss Re’s balance sheet strength is underpinned by consolidated risk-adjusted capitalisation that is comfortably in excess of AM Best’s minimum guideline for the strongest level assessment, as measured by Best’s Capital Adequacy Ratio (BCAR), and its conservative asset allocation and low dependence on retrocession. In addition, AM Best considers Swiss Re’s financial flexibility excellent, supported by effective capital management.

Swiss Re maintains a leading position in the global reinsurance market. In AM Best’s view, the group’s strong brand and excellent geographic diversification partly insulate it from the impact of intense competition in the international reinsurance market and position it well to benefit from the hardening market conditions.

The FSR of A+ (Superior) and the Long-Term ICR of “aa” (Superior) have been affirmed, and the outlook of the Long-Term ICR is negative while the outlook of the FSR is stable, for Swiss Reinsurance Company Ltd and its following affiliates:

• Swiss Re Asia Pte. Ltd.
• Swiss Re Europe S.A.
• Swiss Re International SE
• Swiss Re Corporate Solutions Ltd
• Swiss Re Life & Health America Inc.
• Swiss Reinsurance America Corporation
• Westport Insurance Corporation
• North American Specialty Insurance Company
• North American Capacity Insurance Company
• North American Elite Insurance Company
• Washington International Insurance Company
• First Specialty Insurance Corporation
• iptiQ Life S.A.

The Long-Term ICR of “a” (Excellent) has been affirmed for Swiss Re America Holding Corporation. The outlook is negative.

The following indicative Long-Term IRs on securities available under Swiss Reinsurance Company Ltd’s USD 10 billion debt issuance programme have been affirmed with a negative outlook:

Swiss Reinsurance Company Ltd—
-- “aa” (Superior) on all senior unsecured notes to be issued under the programme
-- “aa-” (Superior) on all senior subordinated notes to be issued under the programme
-- “a+” (Excellent) on all junior subordinated notes to be issued under the programme

The following Long-Term IRs have been affirmed with a negative outlook:

Swiss Reinsurance Company Ltd—
-- “aa-” (Superior) on EUR 500 million 6.625% subordinated notes, due 2042

Swiss Re Treasury (US) Corporation—
-- “aa” (Superior) on USD 250 million 2.875% senior unsecured notes, due 2022
-- “aa” (Superior) on USD 500 million 4.25% senior unsecured notes, due 2042

Swiss Re America Holding Corporation—
-- “a” (Excellent) on USD 600 million 7.00% senior unsecured notes, due 2026 (of which USD 397 million remains outstanding)
-- “a” (Excellent) on USD 350 million 7.75% senior unsecured notes, due 2030 (of which USD 193 million remains outstanding)

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 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 specialising 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. For more information, visit www.ambest.com.

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