A.M. Best affirms credit ratings of Swiss Reinsurance Company Ltd and its affiliates

20 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 Swiss Reinsurance Company Ltd (Switzerland) and its affiliates. At the same time, A.M. Best has affirmed the related Long- and Short-Term Issue Credit Ratings (Long-Term IR; Short-Term IR) of Swiss Reinsurance Company Ltd and its subsidiaries. The outlook of these Credit Ratings (ratings) remains stable.

The ratings reflect the Swiss Re group's (Swiss Re) excellent consolidated risk-adjusted capitalisation, strong operating performance and superior business profile as a leading global reinsurer. The group has been able to return capital to investors in recent years due to strong internal capital generation. Excellent access to capital markets enhances the group's financial flexibility.

The group's five-year (2011-2015) underwriting track record is strong, led by outperformance in its Property & Casualty Reinsurance segment. Good technical profit also is expected for 2016 in this division, subject to catastrophe experience in the remainder of the year. However, A.M. Best expects the full-year 2016 combined ratio to be higher than in 2015 in line with the results reported for the first nine months of the year. The expected increase primarily reflects lower expected favourable reserve developments and higher catastrophe losses. The group's Life & Health Reinsurance segment is expected to meet its performance target of a return on equity of between 10% and 12%, as it did in 2015, following the completion of a number of corrective actions taken on underperforming U.S. portfolios.

The ratings also reflect Swiss Re's position as a leading global reinsurer, which is underpinned by a wide product offering and a worldwide distribution system. The group's Reinsurance segment is well-diversified by line of business and geography. Moreover, the group's product offering is enhanced by the primary non-life insurance business underwritten by its Corporate Solutions division, as well as by the primary life and health closed and open book capabilities of its Life Capital division, which includes its Admin Re business.

The group's superior business profile and strong relationships with reinsureds allow it to write private deals and contracts on differentiated terms, which offer protection against competition from alternative capital providers. Large and tailored private transactions have supported growth in gross premiums in 2016, with gross written premiums for Swiss Re's Property & Casualty Reinsurance segment increasing by 14% in the first nine months of 2016.

The FSR of A+ (Superior) and the Long-Term ICRs of "aa-" have been affirmed for Swiss Reinsurance Company Ltd and its following affiliates:
  • Swiss Re Asia 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
The Long-Term ICR of "a-" has been affirmed with a stable outlook for Swiss Re America Holding Corporation. The Long-Term ICR of "a-"of Swiss Re Solutions Holding Corporation has been withdrawn as the entity merged into Swiss Re America Holding Corporation effective 31 December 2015.

The following Short-Term IR has been affirmed:

Swiss Reinsurance Company Ltd - AMB-1+ on Euro medium-term notes (EMTN) programme

The following Long-Term ICRs have been affirmed with a stable outlook:

Swiss Reinsurance Company Ltd -

- "aa-" on CHF 600 million 2.125% senior unsecured fixed rate bonds, due 2017
- "a" on CHF 320 million 7.25% perpetual subordinated notes
- "a+" on EUR 500 million 6.625% subordinated notes, due 2042
- "a" on USD 750 million 8.25% perpetual junior subordinated capital instruments

ELM B.V.-

- "a" on GBP 500 million 6.302% perpetual junior subordinated step-up notes
- "a" on AUD 300 million 7.635% perpetual junior subordinated step-up notes
- "a" on AUD 450 million variable perpetual junior subordinated step-up notes

Swiss Re Treasury (US) Corporation-


- "aa-" on USD 250 million 2.875% senior unsecured notes, due 2022
- "aa-" on USD 500 million 4.25% senior unsecured notes, due 2042

Swiss Re America Holding Corporation-

- "a-" on USD 400 million 6.45% senior unsecured notes, due 2019 (of which USD 234 million remains outstanding)
- "a-" on USD 600 million 7.00% senior unsecured notes, due 2026 (of which USD 397 million remains outstanding)
-"a-" on USD 350 million 7.75% senior unsecured notes, due 2030 (of which USD 193 million remains outstanding)

The following indicative Long-Term IR for debt securities under the shelf registration has been affirmed with a stable outlook, and then subsequently withdrawn at the company's request:

Swiss Re America Holding Corporation-

- "a-" on senior unsecured debt

The rated issues for Swiss Re America Holding Corporation, including the shelf registration, were originally issued by Swiss Re Solutions Holding Corporation and became the obligations of Swiss Re America Holding Corporation effective 31 December 2015, following the merger of Swiss Re Solutions Holding Corporation into this entity.

Source: A.M. Best's Recent Rating Activity web page

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