The Intelligent Quarterly from the publishers of The Insurance Insider

Spring 2013

Search archive

Advanced search

While preceding decades may have featured a succession of top reinsurers sporting AAA financial strength ratings, a recent survey by sister publication The Insurance Insider indicates that not only is it a fading standard, but that the numbers of AA rated companies also appear to be on the slide.

With only six companies currently boasting AA status, the survey shows there is little evidence that this group is set to grow, as none of the A+ rated reinsurers has a positive outlook.

Berkshire Hathaway still leads the way with a Standard & Poor's (S&P) rating of AA+, although in August the reinsurer's outlook was downgraded to negative.

Immediately behind the Warren Buffet-led firm are Ace, Munich Re, Hannover Re, RenRe and Swiss Re.

Membership of the "Double-A" group has changed twice in the past four months. In October Swiss Re was upgraded to AA- and in February PartnerRe crashed out of the group as S&P downgraded it from AA- status.

Besides PartnerRe, the next tier in the A+ bracket includes RSA, Everest Re, Arch, Axis and Transatlantic Re. Following them are a bigger group of A-rated businesses such as Endurance, Amlin and Alterra. All have stable ratings except Scor, which has had a positive outlook since October 2010.

While the ratings from S&P and AM Best track each other quite closely, there are differences. For example, AM Best has a less differentiated assessment, with some of its A-rated reinsurers variously rated A+ and A- by S&P.

Both ratings agencies have taken negative action against PartnerRe, with AM Best going negative in January, but otherwise there is little correspondence between the outlooks formulated by the competing ratings agencies.

Hannover, which is rated AA- by S&P, is an A for AM Best with a positive outlook, while both Axis and Transatlantic are A for AM Best despite their A+ S&P ratings.

Click to enlarge