Rating agency AM Best has taken RenaissanceRe off negative review, while affirming its financial strength rating of ‘A+’.
AM Best and Moody's both placed RenRe on 'negative outlook' following its agreement to buy Platinum in a $1.9 billion transaction.
Now, the rating agency have said that its actions reflect RenRe's superior level of risk-based 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 insurance cycle.
AM Best also removed RenRe Specialty Risks and RenaissanceRe Specialty US from under review with negative implications. The rating agency said this was because of their strong risk-adjusted capitalisation, sound business plans and strategic business positioning for writing specialty risks.
Offsetting these risks is the fact that RenRe is exposed to catastrophic events on a worldwide basis.
“The reinsurance market, and in particular, the property catastrophe reinsurance segment, is experiencing what appears to be a secular change,” said the rating agency.”Alternative capital has become a market participant and likely will continue to target the property catastrophe reinsurance market, with an appetite to write business at lower yields.”
Top Layer Reinsurance, a RenRe company that was founded in 1999 to underwrite reinsurance and retrocessional reinsurance for very high layers of catastrophe programmes on a world-wide basis, was also taken off negative review and had its ratings affirmed.
The rating agency said that, since Top Layer's inception, it has generated outstanding operating results. These are the result of the property catastrophe underwriting expertise of RenRe, combined with very few catastrophes significant enough to impact the programmes written in Top Layer's core markets.
“Top Layer's business scope is limited to the assumption of high excess layers of non-US property catastrophe risks underwritten on a global basis as is best viewed over a long time horizon,” said AM Best.
AM Best, RenRe, Reinsurance, Bermuda, Top Layer Reinsurance