AM Best revises RenaissanceRe outlooks

AM Best has revised the outlooks to stable from negative and affirmed the financial strength rating (FSR) of A+ (Superior) of Renaissance Reinsurance (RenaissanceRe) and Renaissance Reinsurance of Europe Unlimited Company (Dublin, Ireland).

AM Best also has revised the outlooks to stable from negative and affirmed the Long-Term ICR of “a-” and all long-term issue credit ratings (long-term ICR) of RenaissanceRe Holdings.

In addition, AM Best has revised the outlook of the Long-Term ICR to stable from negative and affirmed the FSR of A (Excellent) and the long-term ICR of “a+” of DaVinci Reinsurance. (DaVinci). The outlook of the FSR remains stable. AM Best also has revised the outlook to stable from negative and affirmed the long-term ICR of “bbb+” of DaVinci Re Holdings.

In addition AM Best has upgraded the FSR to A+ (Superior) from A (Excellent) and the Long-Term ICR to “aa-” from “a+” for Renaissance Reinsurance US (RenRe US). AM Best also has upgraded the FSR to A+ (Superior) from A (Excellent) and the Long-Term ICR to “aa-” from “a” for RenaissanceRe Specialty US (RenRe Specialty US). The outlook of these Credit Ratings (ratings) remains stable. The rating upgrades reflect the companies’ strategic importance to the group, their complete integration into RenaissanceRe’s operations and the implicit support provided to the companies by their parent.

According to the rating agency the ratings of RenaissanceRe reflect its balance sheet strength, which AM Best categorises as strongest, as well as its adequate operating performance, favourable business profile and very strong enterprise risk management (ERM). The ratings also reflect its superior level of risk-adjusted capitalisation, the strength and depth of its management team and the ability of the company to deliver strong long-term profitability over the course of the (re)insurance cycle. Renaissance Re is widely recognised for its leadership in ERM and as a pioneer in third-party capital management. AM Best said that RenaissanceRe remains a leader in property catastrophe and maintains a strong reputation in evaluating risk and effectively deploying capital and as such has attracted capital from outside investors to form several successful joint ventures, include DaVinci and Top Layer Reinsurance.

Partially offsetting these strengths is RenaissanceRe’s exposure to high severity losses associated with catastrophe events around the globe. In addition, the global reinsurance market, and specifically the property catastrophe segment, has experienced overcapacity and pricing pressures over the past few years that in turn has placed pressure on overall returns.

The ratings of DaVinci reflect its balance sheet strength, which AM Best categorises as strongest, as well as its adequate operating performance, limited business profile and very strong ERM. The ratings also recognise DaVinci’s solid operating performance over the past several years and the maintenance of its strong risk-adjusted capitalisation.