A.M. Best has upgraded the financial strength rating (FSR) to A+ (Superior) from A (Excellent) and the issuer credit ratings (ICR) to “aa-“ from “a+” of Transatlantic Reinsurance Company and its subsidiaries (collectively referred to as TransRe). In addition, A.M. Best has upgraded the ICRs to “a-” from “bbb+” and the issue ratings of Alleghany Corporation (Alleghany) [NYSE: Y] and Transatlantic Holdings Inc. The outlook of each rating has been revised to stable from positive. TransRe and Alleghany are headquartered in New York, NY.
Concurrently, A.M. Best has affirmed the FSR of A+ (Superior) and the ICRs of “aa-” of RSUI Indemnity Company and its reinsured subsidiaries, collectively referred to as RSUI Group (RSUI) (headquartered in Atlanta, GA). The outlook for each of these ratings is stable.
A.M. Best also has affirmed the FSR of A (Excellent) and the ICRs of “a” of Capitol Indemnity Corporation and its two subsidiaries, which operate under a pooling agreement, collectively referred to as CapSpecialty Insurance Group (CapSpecialty) (headquartered in Middleton, WI). The outlook for each of these ratings is stable.
Additionally, A.M. Best affirmed the FSR of A- (Excellent) and the ICR of “a-” of Pacific Compensation Insurance Company (Pacific Comp) (headquartered in Thousand Oaks, CA). The outlook for each rating remains stable. (Please see below for a detailed listing of the companies and ratings.)
The upgrading of TransRe’s ratings reflects its strong risk-adjusted capitalization, robust enterprise risk management and consistent operating performance. The upgrade also reflects TransRe’s well-regarded business profile and its highly diversified book of business geographically and by line of business. Also contemplated in the ratings are recent transactions that have further bolstered TransRe’s business profile. In July 2016, TransRe announced that it had entered into an exclusive agreement to serve as the underwriter for U.S. and Canadian broker-sourced treaty business on behalf of General Re Corporation, a subsidiary of Berkshire Hathaway Inc. While the tangible benefits of the agreement have not yet been realized, the additional capacity is expected to enhance TransRe’s overall competitive position. Additionally, TransRe and an American International Group, Inc. subsidiary engaged in commutation of historical asbestos and environmental exposures that have been a long-standing, albeit modest, drag on overall earnings. Going forward it is A.M. Best’s expectation that while TransRe’s return measures are unlikely to be at the high end of the companies’ peer group, TransRe will continue to produce favorable results, supportive of its ratings and with lower volatility relative to peers over the course of the full cycle.
The ratings of RSUI continue to reflect the group’s strong risk-adjusted capitalization and excellent track record of superior underwriting results that have outperformed the industry. Although RSUI has significant catastrophe exposures and elevated equity leverage in its investment portfolio, both are closely monitored and managed as part of RSUI’s risk management planning.
CapSpecialty’s ratings recognize its strong and sustained levels of risk-adjusted capitalization and its ongoing process of re-orienting its book of business to produce more stable results. CapSpecialty benefits from the implicit and explicit support of Alleghany, its ultimate parent.
The ratings and outlooks of Pacific Comp are based on A.M. Best’s expectation that explicit support through intercompany reinsurance and direct capital support will remain ongoing or increased if needed.
The FSR has been upgraded to A+ (Superior) from A (Excellent) and the ICRs upgraded to “aa-” from “a+” for Transatlantic Reinsurance Company and its following subsidiaries:
- TransRe Zurich Ltd.
- TransRe London Limited
- Fair American Insurance and Reinsurance Company
- Fair American Select Insurance Company
The FSR of A+ (Superior) and the ICRs of “aa-” have been affirmed for the following members of RSUI Group:
- RSUI Indemnity Company
- Landmark American Insurance Company
- Covington Specialty Insurance Company
The FSR of A (Excellent) and ICRs of “a” has been affirmed for the following members of CapSpecialty Insurance Group:
- Capitol Indemnity Corporation
- Platte River Insurance Company
- Capitol Specialty Insurance Corporation
The following issue ratings have been upgraded:
— to “a-” from “bbb+” on $299 million 5.625% senior unsecured notes, due 2020
— to “a-” from “bbb+” on $400 million floating rate senior unsecured notes, due 2022
— to “a-” from “bbb+” on $300 million 4.9% senior unsecured notes, due 2044
Transatlantic Holdings Inc.—
— to “a-” from “bbb+” on $350 million 8% senior unsecured notes, due 2039
This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page.
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