A.M. Best Co. has affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit ratings (ICR) of "aa-" of Swiss Reinsurance Company Ltd (Swiss Re) (Zurich, Switzerland) and its subsidiaries.
Concurrently, A.M. Best has affirmed all debt ratings of Swiss Re and its subsidiaries. The outlook for all ratings is stable. (See link below for a detailed listing of companies and ratings.)
Swiss Re continues to maintain a dominant position in its chosen markets and benefits from a global franchise with a large selection of products along with a worldwide distribution system. The company has established sound client relationships with some of the leading companies in the world while offering larger lines and capacity. Swiss Re's market presence is fully supported by its superior risk- based capitalization and robust risk management capabilities.
Operating results through the first nine months of 2012 for the property/casualty reinsurance business segment reflected the low level of catastrophes with a combined ratio of 78.1 percent, while the primary insurance segment, Swiss Re Corporate Solutions Ltd, performed better than breakeven with a combined ratio of 94.0 percent. The life/health reinsurance segment performed well with a benefit ratio of 75.8 percent. During the fourth quarter of 2012, Swiss Re reported a Hurricane Sandy net loss estimate of $900 million. Despite this loss, the company is anticipated to report profitable results for the year ending December 31.
Over the past several years, Swiss Re has consistently maintained superior levels of risk-based capitalization, benefitting from its diverse books of business and efficient capital management program. Additionally, Swiss Re maintains minimal levels of exposure to sovereign risk emanating from Europe's more troubled economies, along with minimal exposure to European banks.
A.M. Best considers Swiss Re's risk management program to be very effective. The organization dedicates a significant level of personnel on a worldwide basis to monitor risk in all operating segments as part of its formal risk management program. Swiss Re also makes extensive use of its proprietary capital model to analyze various stress scenarios on its entire operation as well as on individual business segments.
Positive rating actions could occur if over the next several years, Swiss Re's operating performance and risk-adjusted capitalization significantly and consistently exceed its peer group of global reinsurers.
Negative rating actions could occur if Swiss Re's operating performance and risk-adjusted capitalization consistently fall below A.M. Best expectations for its current rating level by a significant margin for a prolonged period.
For a complete listing of Swiss Reinsurance Company Ltd and its subsidiaries' FSRs, ICRs and debt ratings: ambest.com/press/ 012306swissre.pdf.
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. Key criteria utilized include: "Risk Management and the Rating Process for Insurance Companies"; "Understanding BCAR for Property/Casualty Insurers"; "Catastrophe Analysis in A.M. Best Ratings"; "Understanding Universal BCAR"; "Rating Members of Insurance Groups"; "Insurance Holdings Company and Debt Ratings", "Commercial Paper Methodology"; and "Equity Credit for Hybrid Securities." Best's Credit Rating Methodology can be found at www.ambest.com/ ratings/methodology.
A.M. Best Company is an insurance rating and information source.
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