A.M. Best Affirms Ratings of Transatlantic Holdings, Inc. and Its Subsidiaries

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of “a” of Transatlantic Reinsurance Company(Transatlantic) (New York, NY), Trans ReZurichReinsurance Company Ltd. (Switzerland) and <org>Putnam Reinsurance Company (New York, NY). Concurrently, A.M. Best has affirmed the ICR of “bbb” and debt ratings of “bbb” on $750 million 5.75% senior unsecured notes due 2015, $350 million 8% senior unsecured notes due 2039, as well as the indicative debt ratings of “bbb” on senior unsecured securities and “bbb-” on the subordinated securities under the shelf registration of the parent holding company; Transatlantic Holdings Inc. (New York, NY) [NYSE: TRH]. The outlook for all ratings is stable.

The rating affirmations reflect Transatlantic’s excellent business profile as a leading international reinsurance organization, with a book of business that is diversified by product line and geography. Transatlantic predominately writes casualty-oriented business, and it has a relatively long track record of stable and consistent operating results, which have generated very strong operating cash flows. Throughout 2010, the company’s risk-adjusted capital has continued to improve and is currently at its strongest level in recent history. At the consolidated holding company level, debt measures and fixed charge coverage remain at comfortable levels that are commensurate with Transatlantic’s ratings.

Partially offsetting these positive rating attributes are A.M. Best’s concerns regarding the soft casualty market, from which Transatlantic derives a significant portion of its premiums as well as reserve adequacy on its casualty-oriented business. In addition, as a casualty writer, Transatlantic has a significant amount of investment leverage; although, this concern is somewhat mitigated based on the company’s investing philosophy.

The FSR of A (Excellent) and ICR of “a” of Transatlantic Holdings, Inc. Group have been withdrawn and an NR-5 assigned to the FSR and an “nr” to the ICR, since it is no longer utilized for analytical purposes.

The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; Understanding Universal BCAR for Property/Casualty Insurers”; “Natural Catastrophe Stress Test Methodology”; “A.M. Best’s Ratings & the Treatment of Debt”; and “Rating Members of Insurance Groups.” Methodologies can be found at www.ambest.com/ratings/methodology.

Founded in 1899, 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 © 2010 by A.M. Best Company, Inc.ALL RIGHTS RESERVED.

A.M. Best Co.
Greg Reisner, 908-439-2200, ext. 5224
Senior Financial Analyst
[email protected]
or
Peter Dickey, 908-439-2200, ext. 5053
Assistant Vice President
[email protected]
or
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
[email protected]
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
[email protected]

Source: A.M. Best Co.