A.M. Best Affirms Ratings of Swiss Reinsurance Company Ltd and Its European Affiliates

A.M. Best Europe - Rating Services Limited has affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit ratings (ICR) of "aa-" of Swiss Reinsurance Company Ltd (Switzerland), European Reinsurance Company of Zurich Ltd (Switzerland), Swiss Re Europe S.A. (Luxembourg), Swiss Re International SE (Luxembourg) and Swiss Re Corporate Solutions Ltd (Switzerland). At the same time, A.M. Best has affirmed the related debt ratings of Swiss Reinsurance Company Ltd and subsidiaries. (See link below for a detailed list of debt ratings). The outlook for all ratings is stable.

The ratings reflect the Swiss Re group's excellent consolidated risk-adjusted capitalisation, strong operating performance and superior business profile as a leading global reinsurer. These positive rating factors are partially offset by the Swiss Re group's significant exposure to natural and man-made catastrophes, as well as the continued impact of soft market conditions on growth opportunities and technical profitability in the global property/casualty reinsurance market.

The group is expected to continue to benefit from excellent consolidated risk-adjusted capitalisation, despite a decline in 2013 reflecting regular and special dividend payments, a decrease in unrealised gains reserve due to rising interest rates and an increase in the group's underwriting risk due to the expiry of its property/casualty whole account quote share with a subsidiary of Berkshire Hathaway, Inc.

The group's risk-adjusted capitalisation benefits from good diversification and is enhanced by hybrid debt, including several contingent capital instruments issued in the last few years which improve financial flexibility. In addition, the Swiss Re group has negligible exposure to peripheral European sovereign debt.

The group's performance record in recent years has been strong, and A.M. Best expects good results to be reported for 2013, with the three business segments--Reinsurance, Corporate Solutions and Admin Re-- contributing positively to the result. A.M. Best expects the Property & Casualty Reinsurance and Corporate Solutions segments to report strong profits, benefitting from the relatively benign catastrophe experience of the year. In Life & Health Reinsurance, A.M. Best expects a good result, despite the earnings drag from some underperforming U.S. portfolios.

The ratings benefit from the Swiss Re group's position as a leading global reinsurer, underpinned by a wide product offering and a worldwide distribution system. The Reinsurance segment is well-diversified by line of business and geography. Moreover, the group's product offering is further enhanced by the primary insurance business underwritten by Corporate Solutions and Admin Re's capabilities within the closed block life business segment.

Positive rating actions could occur if over the next several years, Swiss Re group's operating performance and consolidated risk-adjusted capitalisation consistently exceed that of peer reinsurers.

Negative rating actions could occur if operating performance or consolidated risk-adjusted capitalisation were to fall below A.M. Best's expectations for the group's current rating level.

For a detailed listing of related debt ratings, please visit www.ambest.com/press/013103swissre.pdf.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.

A.M. Best Europe - Rating Services Limited is a subsidiary of A.M. Best Company. A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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