A.M. Best has revised the outlook to positive from stable and
affirmed the financial strength rating (FSR) of A (Excellent) and issuer
credit ratings (ICR) of "a+" of Transatlantic Reinsurance Company
(TransRe), and its subsidiaries, Fair American Insurance and
Reinsurance Company, Fair American Select Insurance Company
and Trans Re Zurich Ltd. (Switzerland).
In addition, A.M. Best has revised the outlook to positive from stable
and affirmed the ICRs of "bbb+" and debt ratings of Alleghany
Corporation (Alleghany) [NYSE:Y] and Transatlantic Holdings Inc.
Concurrently, A.M. Best Europe - Rating Services Limited has
revised the outlook to positive from stable and affirmed the FSR of A
(Excellent) and the ICR of "a+" of TransRe London Limited (United
Kingdom). All companies are headquartered in New York, unless otherwise
specified. (See below for a detailed listing of the debt ratings.)
The positive outlook reflects TransRe's strong global business profile,
solid operating results and robust risk management practices. The
ratings also reflect TransRe's excellent risk-adjusted capitalization,
diversified book of business and stabilized reserve position. Year-end
2013 results were at or near historic highs, due to discipline
underwriting and the relatively benign level of catastrophic events and
strong investment ncome despite a difficult investment environment for
TransRe's largely fixed income portfolio.
TransRe also benefits from the support and stability provided by
Alleghany, as both organizations have benefitted from TransRe's
acquisition and integration into the Alleghany operations. Both
Alleghany and TransRe Holdings' debt-to-capital and coverage ratios
remain well within the acceptable range for their current ratings.
Partially offsetting these positive attributes are A.M. Best's concerns
regarding current conditions in the reinsurance market, which have
become increasingly competitive due to increased capacity in the market
and greater retentions among primary insurers putting additional
pressure on traditional reinsurers.
Potential upward movement on TransRe's ratings could result from
continued consistent operating performance and sustained strong
risk-adjusted capitalization. Negative rating actions could occur if
TransRe incurs an outsized catastrophic or investment loss relative to
its peer group, or its operating performance consistently falls below
the market, resulting in erosion of its capital base and a decline in
its risk-based capitalization.
The following debt ratings have been affirmed:
Alleghany Corporation-- "bbb+" on $299 million 5.625%
senior unsecured notes, due 2020- "bbb+" on $400 million 4.95%
senior unsecured notes, due 2022
Transatlantic Holdings Inc.-- "bbb+" on $750 million 5.75%
senior unsecured notes, due 2015 ($667 million currently outstanding)-
"bbb+" on $350 million 8% senior unsecured notes, due 2039
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. Best's Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.
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 © 2014 by A.M. Best Company, Inc. ALL RIGHTS
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