Ratings agency A.M. Best showed confidence in
) as it avowed the credibility of the company and upgraded the
outlook to 'stable' from 'negative.'
Accordingly, the ratings agency asserted the debt ratings and
issuer credit rating (ICR) of "a-" for PartnerRe, who also
affirmed the financial strength rating (FSR) of "A+" and ICR of
"aa-" for Partner Reinsurance Co. Ltd.Meanwhile, A.M. Best raised
the FSR of "A" from "A-" and ICR of "a+" from "a-" of PartnerRe
America Insurance Co.
The improved outlook reflects PartnerRe's strong capital position
and relatively stable results throughout 2012. In Apr last year,
A.M. Best had assigned a negative outlook to PartnerRe and its
subsidiaries, thereby downgrading it from the stable outlook. The
ratings agency was wary of the severity of catastrophe (CAT)
losses, which had heavily battered the company's financials in
Nevertheless, lower CAT losses improved the technical results and
return on equity in 2012 and so far in 2013. Moreover, a prudent
reinsurance strategy, strong risk profile and diverse business
mix across its operational regions are yielding results. These
factors also supported the favorable development of reserves,
thereby positioning the company higher than the peer group.
However, A.M. Best continues to remain wary of the successful
integration of the Asian operations of Paris Re Ltd., which was
acquired by PartnerRe in 2009. As a result, FSR of Paris Re was
downgraded to "B++" from "A-," while its ICR was demoted to
"bbb+" from "a-." The ratings agency has also pulled out this
business from its assessment list.
We believe that the Presidio acquisition complements PartnerRe's
growth strategy through diversification. Overall, the company
enjoys above-averageliquidity and a low-risk balance sheet, which
isreflected in its consistent and efficient capital
While PartnerRe carries a Zacks Rank #2 (Buy), other strong
performers in the insurance sector include
Axis Capital Holders Ltd
Platinum Underwriters Holdings
). All these stocks carry a Zacks Rank #1 (Strong Buy).
AXIS CAP HLDGS (AXS): Free Stock Analysis
MONTPELIER RE (MRH): Free Stock Analysis
PARTNERRE LTD (PRE): Free Stock Analysis
PLATINUM UNDRWT (PTP): Free Stock Analysis
To read this article on Zacks.com click here.