2008-08-27 00:51:02 -
www.ambest.com - A.M. Best Co. has affirmed the financial strength rating (FSR) of A++ (Superior) and issuer credit ratings (ICR) of "aa+" of General Re Group and its members (Gen Re) (Delaware). These ratings apply to General Reinsurance Corporation (Delaware) and its core property/casualty and life reinsurance and insurance subsidiaries operating both in the United States and internationally. In addition,
A.M. Best has affirmed the ICR and senior debt ratings of "aa+" and the commercial paper of AMB-1+ of Gen Re's direct parent, General Re Corporation (headquartered in Connecticut). The outlook for all ratings is stable. (See below for a detailed listing of the companies and ratings.)
These ratings reflect Gen Re's superior capitalization, excellent business position as a leader within the global reinsurance marketplace and adherence to stringent underwriting discipline, which lends to the group's strong prospective earnings capability. In addition, solid investment earnings continue to support excellent total return measures, while Gen Re maintains strong liquidity given the solid credit quality of its fixed income holdings. The group's superior ratings also reflect the implicit and explicit financial support provided by its ultimate parent, Berkshire Hathaway Inc. (Nebraska).
Gen Re's risk-adjusted capitalization has improved considerably over the most recent five-year period, supported by sizeable reinsurance transactions with affiliates, National Indemnity Company and Columbia Insurance Company, both currently rated A++ (Superior). These reinsurance transactions, which were effective on January 1, 2005, include a loss portfolio reinsurance contract and a quota share reinsurance contract, both of which provided significant reinsurance protection to Gen Re. Additionally, strong total return measures bolstered by very strong underwriting results and solid investment income generation have supported the group's ability to generate the accumulation of capital, as its consolidated GAAP equity approximated $12.5 billion at year-end 2007.
Somewhat offsetting these positive rating factors are the competitive pressures in the global property/casualty reinsurance market, which could potentially suppress Gen Re's mid-to-long-term underwriting results and pressure its overall expense position. Furthermore, although Gen Re has considerably strengthened its overall loss reserve position, there has been some adverse development on prior accident year casualty reserves primarily attributed to workers' compensation, and environmental claims. Given Gen Re's stringent underwriting and improved reserving practices, the impact of prior year reserve development has moderated significantly, while recent accident year loss ratios are demonstrating favorable trends. Due to the aforementioned reinsurance transactions, Gen Re's overall liability leverage is conservative, which reduces the impact of potential loss reserve development on its risk-adjusted capitalization.
The affirmation of the ratings of General Re Life Corporation (General Re Life) (Stanford, CT) reflect a weak underwriting profit, which is due to poor results in long-term care and discontinued workers' compensation carve out business. The ratings of General Re Life recognize the ongoing support provided by Gen Re, and therefore are afforded the group ratings status.
The FSR of A++ (Superior) and ICRs of "aa+" have been affirmed for General Re Group and its following core property/casualty and life reinsurance and insurance members:
-- General Re Life Corporation
-- Faraday Reinsurance Company Limited
-- General Reinsurance Corporation
-- General Star Indemnity Company
-- General Star National Insurance Company
-- Genesis Indemnity Insurance Company
-- Genesis Insurance Company
-- General Reinsurance UK Limited
-- Kolnische Ruckversicherungs-Gesellschaft AG
-- General Reinsurance Australia Ltd
-- General Reinsurance Africa Ltd.
-- General Reinsurance Life UK Limited
-- General Reinsurance Life Australia Ltd.
The ICR of "aa+" has been affirmed for General Re Corporation.
The following debt ratings have been affirmed:
General Re Corporation--
-- "aa+" on $150 million 9% senior unsecured debentures, due 2009
-- AMB-1+ on commercial paper
The FSR of A- (Excellent) and ICR of "a-" have been affirmed for Idealife Insurance Company.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.
A.M. Best Co.
Analysts
Devin Inskeep, 908-439-2200, ext. 5449
devin.inskeep@ambest.com
or
Robert DeRose, 908-439-2200, ext. 5453
robert.derose@ambest.com
or
Public Relations
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com 
