AM Best Affirms Credit Ratings of RenaissanceRe Holdings Ltd. and Its Main Subsidiaries

Rhea-AI Summary

AM Best has affirmed the Financial Strength Rating (FSR) of A+ and the Long-Term Issuer Credit Ratings (ICR) of 'aa-' for RenaissanceRe (NYSE: RNR) and its subsidiaries, highlighting their strong balance sheet and risk management. These ratings reflect the company's robust capitalization, effective underwriting practices, and diversification into specialty lines. The outlook remains stable, with expectations of pricing improvements across key product lines, although there remains exposure to high severity catastrophe events.

Positive

• Affirmation of A+ FSR and 'aa-' ICR by AM Best indicates strong financial health.
• Stable outlook suggests confidence in future performance.
• Diversification in specialty property/casualty lines contributes to over 50% of premiums.
• Strong capital management enables effective risk assessment and joint ventures.

Negative

• Exposure to high severity losses from global catastrophe events remains a concern.

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa-” (Superior) 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-” (Excellent) and the 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+” (Excellent) of DaVinci Reinsurance Ltd. (DaVinci) and the Long-Term ICR of “bbb+” (Good) of DaVinciRe Holdings Ltd. Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a+” (Excellent) 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 assesses as strongest, as well as its adequate operating performance, favorable business profile and very strong enterprise risk management (ERM).

AM Best’s assessment of RenaissanceRe’s overall balance sheet strength considers the superior consolidated risk-adjusted capitalization of its ultimate parent, RenaissanceRe Holdings Ltd., which typically maintains significant capital at the holding company level that is available to be down-streamed into its underwriting companies as needed.

RenaissanceRe’s ratings also benefit from the strength and depth of the company’s management team and ability to deliver strong, long-term profitability over the course of the market cycle. While RenaissanceRe remains a leader in the property catastrophe reinsurance segment, the company has gained significant traction in specialty property/casualty lines, which now comprise more than half of its underwriting premiums. RenaissanceRe is also widely recognized for its leadership in ERM, modeling capabilities and as a pioneer in third-party capital management, where it maintains a strong reputation in evaluating risk and effectively deploying capital. As a result, it has attracted capital from outside investors to form several successful joint ventures, including DaVinci, Top Layer Reinsurance Ltd., Vermeer, and most recently, Fontana Holdings L.P., its first third-party reinsurance capital-backed joint venture focused on casualty and specialty risks.

Partially offsetting these strengths is RenaissanceRe’s exposure to high severity losses associated with global catastrophe events, although the company’s underwriting results and overall operating performance has grown increasingly less volatile, as diversifying business lines have mitigated the impact of catastrophe losses. Looking forward, RenaissanceRe appears well-positioned to benefit from ongoing broad-based pricing improvement in most of its key product lines.

The ratings of DaVinci reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and very strong ERM. DaVinci’s profile is enhanced due to its affiliation to RenaissanceRe. Additionally, DaVinci’s catastrophe-stressed Best’s Capital Adequacy Ratio (BCAR) analysis contemplated its USD500 million capital raise on Jan 1, 2022.

The ratings of Vermeer reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and very strong ERM.

The following Long-Term IRs have affirmed with stable outlooks:

RenaissanceRe Holdings Ltd.
-- ­“bbb” (Good) on $250 million 5.75% non-cumulative fixed rate Series F perpetual preferred stock

RenaissanceRe Finance Inc. (guaranteed by RenaissanceRe Holdings Ltd.)
-- “a-” (Excellent) on $300 million 3.7% senior unsecured notes, due 2025
-- “a-” (Excellent) on $300 million 3.45% senior unsecured notes, due 2027

The following indicative Long-Term IRs under the shelf registration have been affirmed with stable outlooks:

RenaissanceRe Holdings Ltd.
-- “a-” (Excellent) on senior unsecured
-- “bbb+” (Good) on subordinated
-- “bbb” (Good) on preferred stock

RenaissanceRe Capital Trust II
-- “bbb” (Good) 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 use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2022 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220721005683/en/

Gregory Dickerson

Associate Director

+1 908 439 2200, ext. 5161

gregory.dickerson@ambest.com

Clare Finnegan

Senior Financial Analyst

+1 908 439 2200, ext. 5165

clare.finnegan@ambest.com

Steven Chirico

Director

+1 908 439 2200, ext. 5087

steven.chirico@ambest.com

Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com

Jeff Mango

Managing Director,

Strategy & Communications

+1 908 439 2200, ext. 5204

jeffrey.mango@ambest.com

Source: AM Best

FAQ

What was the recent credit rating update for RenaissanceRe (RNR)?

AM Best affirmed the Financial Strength Rating of A+ and Long-Term Issuer Credit Ratings of 'aa-' for RenaissanceRe (RNR).

How does RenaissanceRe's diversification affect its ratings?

RenaissanceRe's diversification into specialty property/casualty lines, comprising over 50% of its premiums, positively influences its ratings.

What does a stable outlook from AM Best signify for RenaissanceRe (RNR)?

A stable outlook indicates that AM Best expects RenaissanceRe to maintain its strong financial position and performance.

What are the implications of AM Best's ratings for RenaissanceRe investors?

The affirmed ratings suggest that RenaissanceRe is well-positioned for long-term profitability, which may positively influence investor confidence.