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Le 25 septembre, 2008: |
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OLDWICK, N.J., Sep 25, 2008 (BUSINESS WIRE) -- A.M. Best Co. has affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit ratings (ICR) of "aa-" of Munich Reinsurance Company (Munich Re) (Munich, Germany) and its subsidiaries. At the same time, A.M. Best has affirmed the debt ratings of "a+" on GBP 300 million 7.625% subordinated bonds and EUR 3 billion 6.75% subordinated Eurobonds issued by Munich Re. Concurrently, A.M. Best has upgraded the debt rating to "a+" from "a" on EUR 1.5 billion fixed/floating rate undated subordinated bonds also issued by Munich Re to reflect the ranking of debt relative to policyholder obligations of German reinsurers. The outlook for these ratings is stable. In addition, A.M. Best has affirmed the ICR and senior debt ratings of "bbb+" of Munich Re America Corporation (Princeton, NJ). The outlook for the debt is positive, and the outlook for the ICR has been revised to positive from stable. (See below for a detailed listing of the companies and ratings.) The above ratings reflect Munich Re's strong risk-adjusted capitalization, excellent underwriting performance and superior business profile. Munich Re remains a leading global carrier in the reinsurance market, and through its network of local subsidiaries, a dominant primary insurer in the German market, especially in health insurance. As part of its Changing Gear program launched in 2007, Munich Re made several strategic business acquisitions in 2007 and 2008. These included a leading U.S. provider of the growing health insurance for seniors, a leading U.S. specialist insurer of manufactured housing and mobile homes, a short-tail property insurance syndicate at Lloyd's and business partnerships in India, Malaysia and South Korea. The group's total written premium volume fell by less than one percent in both 2007 and the first half of 2008. This was due to difficult market conditions and the strength of the Euro against the U.S. dollar and many other currencies, particularly in the reinsurance segment where Munich Re operates on a global basis. Munich Re's risk-adjusted capitalization remains at levels appropriate for its financial strength ratings despite significant reduction in equity reserves, primarily driven by price corrections on the stock markets on non-fixed interest securities during the first half of 2008. The company continues to execute its series of strategic multi-year share buy back programs that started in November 2006. A.M. Best will monitor and evaluate the impact of these transactions on Munich Re's risk-adjusted capitalization in light of the recent intensified stock market dislocations, or capital that may be required by its profitable growth initiative under the Changing Gear program and any additional strategic business acquisitions. Munich Re's business performed very successfully in 2007, benefiting from good business development and profitability of its life/health segment, excellent underwriting performance by its property/casualty segment and a very good investment result that exceeded its target return on investment. The group's 2007 net income easily surpassed its target corridor for the year. For the first six months of 2008, Munich Re posted excellent underwriting results despite numerous small amounts of individual losses from a series of natural catastrophe events and man-made losses and partly benefiting from the first time consolidation of companies acquired in the United States and South Korea. However, the consolidated result for the first half of 2008 fell by 34% compared to the same period in 2007, primarily due to the impact on the investment result of marked price losses on the stock markets and fall in the U.S. dollar. Given the enormous scale of the turmoil on the financial markets and the resulting impairments of equities and low net gains on disposals, A.M. Best believes that Munich Re's half year results are satisfactory. Munich Re has revised its full year net profit expectation to be well over EUR 2 billion but below the previously set annual profit target of EUR 3.0-3.4 billion. Munich Re's asbestos and environmental-related (A&E) claim reserves have stabilized since 2006. Given the latent nature of A&E exposures, evolving U.S. court decisions and indefinite nature of any future U.S. tort reform, Munich Re remains exposed to potential significant adverse development on its A&E liabilities. The FSR of A+ (Superior) and ICRs of "aa-" have been affirmed for Munich Reinsurance Company and its following core subsidiaries: -- American Alternative Insurance Corporation SOURCE: A.M. Best Company The Munich Re Group operates worldwide, turning risk into value. In the financial year 2006, it achieved a profit of €3,519m, the highest since the company was founded in 1880, on premium income of approximately €37bn. The Group operates in all lines of business, with around 37,000 employees at over 50 locations throughout the world and is characterised by particularly pronounced diversification, client focus and earnings stability. With premium income of around €22bn from reinsurance alone, it is one of the world's leading reinsurers. Its primary insurance operations are mainly concentrated in the ERGO Insurance Group. With premium income of almost €17bn, ERGO is one of the largest insurance groups in Europe and Germany. It is the market leader in Europe in health and legal expenses insurance, and 33 million clients in 25 countries place their trust in the services and security it provides. The global investments of the Munich Re Group amounting to €177bn are managed by MEAG, which also makes its competence available to private and institutional investors outside the Group. Disclaimer |
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