AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long Term Issuer Credit Ratings (Long-Term ICR) of "aa-" of Renaissance Reinsurance Ltd. (RenaissanceRe), Renaissance Reinsurance U.S. Inc. (Maryland), RenaissanceRe Specialty U.S. Ltd., Renaissance Reinsurance of Europe Unlimited Company (Dublin, Ireland) and RenaissanceRe Europe AG (Zurich, Switzerland) (formally named Tokio Millennium Re AG). Additionally, AM Best has affirmed the Long-Term ICR of "a-" and Long-Term Issue Credit Ratings (Long-Term IR) of RenaissanceRe Holdings Ltd. [NYSE: RNR]. AM Best also has affirmed the FSR of A (Excellent) and the Long-Term ICR of "a+" of DaVinci Reinsurance Ltd. (DaVinci) and the Long-Term ICR of "bbb+" of DaVinciRe Holdings Ltd. Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of "a+" of Vermeer Reinsurance Ltd. (Vermeer). The outlook of these Credit Ratings (ratings) is stable. All aforementioned companies are domiciled in Bermuda unless otherwise specified. (See below for a detailed listing of the Long-Term IRs.)
The ratings of RenaissanceRe reflect the group’s balance sheet strength, which AM Best categorizes as strongest, as well as its adequate operating performance, favorable business profile and very strong enterprise risk management (ERM).
The ratings of DaVinci reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and very strong ERM. The ratings also recognize DaVinci’s solid operating performance over the past several years and the company’s ability to maintain a very strong risk-adjusted capitalization. DaVinci’s profile is enhanced due to its affiliation to RenaissanceRe.
The ratings of Vermeer reflect its balance sheet strength, which AM Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and very strong ERM.
The ratings of RenaissanceRe also reflect its superior level of risk-adjusted capitalization, 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 market cycle. RenaissanceRe is widely recognized for its leadership in ERM, modeling capabilities and as a pioneer in third-party capital management. RenaissanceRe remains a leader in the property catastrophe reinsurance segment 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, including DaVinci, Top Layer Reinsurance Ltd. and Vermeer.
Partially offsetting these strengths is RenaissanceRe’s exposure to high severity losses associated with global catastrophe events. In addition, the global reinsurance market, and specifically the property catastrophe segment, has experienced overcapacity and pricing pressures over the past few years, which in turn has placed pressure on overall returns.
RenaissanceRe indicated that during first-quarter 2020 it had net claims and claim expenses of $104 million associated with the COVID-19 pandemic, which primarily represents IBNR related to exposures such as event contingency and event-based casualty covers. Currently, AM Best considers these losses manageable given RenaissanceRe’s limited profile in classes that are expected to be most impacted. AM Best will continue to monitor the situation with the COVID-19 pandemic and possible loss development for RenaissanceRe and the industry.
The following Long-Term IRs have affirmed with a stable outlook:
RenaissanceRe Holdings Ltd.
-- "bbb" on $275 million 5.375% non-cumulative Series E perpetual preferred stock
-- "bbb" on $250 million 5.75% non-cumulative fixed rate Series F perpetual preferred stock
RenaissanceRe Finance Inc. (guaranteed by RenaissanceRe Holdings Ltd.)
-- "a-" on $300 million 3.7% senior unsecured notes, due 2025
-- "a-" on $300 million 3.45% senior unsecured notes, due 2027
The following indicative Long-Term IRs under the shelf registration have been affirmed with a stable outlook:
RenaissanceRe Holdings Ltd.
-- "a-" on senior unsecured
-- "bbb+" on subordinated
-- "bbb" on preferred stock
RenaissanceRe Capital Trust II
-- "bbb" on trust preferred securities
This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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