A.M. Best affirms credit ratings of General Reinsurance Corporation (Gen Re) and its subsidiaries

22 December 2016 —
A.M. Best has affirmed the Financial Strength Rating (FSR) of A++ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of "aa+" of General Reinsurance Corporation (headquartered in Stamford, CT) and its core property/casualty and life reinsurance/insurance subsidiaries operating in the United States and internationally. These companies are collectively known as the General Re Group (Gen Re).

In addition, A.M. Best has affirmed the Long-Term ICR of "aa+" of General Re Corporation. The outlook of these Credit Ratings (ratings) is stable. (Please see below for a detailed listing of the companies and ratings.)

The ratings reflect Gen Re's strong operating performance and consistently superior risk-based capitalization, as well as its well-diversified operating platform, which is diversified by geography and product, including property/casualty and life business segments with worldwide market profiles. These positive rating attributes are enriched by the support provided by Gen Re's ultimate parent, Berkshire Hathaway Inc. (Berkshire), and the reinsurance coverages provided by Berkshire affiliates, National Indemnity Company (National Indemnity) and Columbia Insurance Company (CIC), both with an FSR of A++ (Superior). The Berkshire relationship provides Gen Re with access to enhanced financial flexibility and investment expertise. The National Indemnity and CIC reinsurance coverages, which were effective Jan. 1, 2005, provide substantial reinsurance protection to Gen Re's U.S. property/casualty companies through a loss portfolio transfer and quota share agreement. Earlier in 2016, Gen Re entered into a partnership agreement in order to access property/casualty treaty broker market business in the United States and Canada. This deal signifies Gen Re's shift in approach to the market going forward.

Gen Re consistently maintains superior risk-based capitalization that is fully supportive of its ratings and risk appetite, and is further enhanced by an operating performance that is supplemented by a steady flow of investment income from its well-diversified investment portfolio managed by Berkshire. Gen Re also maintains an extensive risk management program that measures risk throughout its worldwide operations. Enterprise risk management serves as a positive rating factor and the program includes formal risk management committees, a capital model and well-documented corporate governance.

Gen Re's life operations continue to maintain positive operating earnings and adequate capital to support their overall insurance operations. Gen Re's life operations primarily consist of individual life insurance and accident and health reinsurance lines of business. The life operations continue to perform well and the life book of business has grown in recent years. In addition, the investment portfolio has performed well. Partially offsetting these strengths are the continued losses in the long-term care line of business, which is in run-off. The life operations are expected to remain an important source of income and diversification for Gen Re.

Negative rating actions could occur if either Gen Re's operating performance or risk-adjusted capitalization consistently fall below A.M. Best's expectations for its current rating level by a significant margin for a prolonged period.

The FSR of A++ (Superior) and the Long-Term ICRs of "aa+" have been affirmed for General Reinsurance Corporation and its following core property/casualty and life reinsurance/ insurance subsidiaries:
  • General Re Life Corporation
  • General Reinsurance Australia Ltd
  • General Reinsurance Life Australia Ltd.
  • General Reinsurance AG
  • General Reinsurance Africa Ltd.
  • General Star Indemnity Company
  • General Star National Insurance Company
  • Genesis Insurance Company
The FSR of A- (Excellent) and the Long-Term ICR of "a-" have been affirmed for IdeaLife Insurance Company (Stamford, CT), a subsidiary of General Re Life Corporation. The outlook of these ratings remains stable.

Source: Best's Insurance News & Analysis

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