A.M. Best grades Swiss Re ‘A+’ following merger with GE

A.M. Best Co. has affirmed the financial strength rating (FSR) of A+ (Superior) and the issuer credit rating (ICR) of “aa” of Swiss Reinsurance Company (Swiss Re) (Switzerland) and its rated subsidiaries, following the company’s completed acquisition of GE Insurance Solutions.

The ratings have been removed from under review, where they were placed on Nov.18 , 2005 with negative implications. A.M. Best has now assigned a negative outlook to Swiss Re’s ICRs and debt ratings and a stable outlook to the FSRs.

“In A.M. Best’s view, Swiss Re’s risk-adjusted capitalization remains very strong following the acquisition of GEIS, despite higher capital requirements from an increased exposure of the combined group to natural catastrophes and other acquisition effects,” A.M. Best announced in a press release. Specifically, A.M. Best noted a profit of CHF1.6 billion (US$1.3 billion) and internal financing of US$1.2 billion.

“Swiss Re achieved an excellent post-tax profit of CHF1.6 billion (US$1.3 billion) (which includes 21 days of GEIS’ results) in the first six months of 2006, benefiting from stable premium rates but also from benign catastrophe and a large claims environment in this period,” A.M. Best noted in a press release. “The overall combined ratio for Swiss Re’s traditional property and casualty book of business improved by 3.3 percentage points to 93% in the first six months of 2006. “

A.M. Best said it expected the property and casualty results for the full year of 2006 “will be largely influenced by the U.S. hurricanes season in the second half of 2006.”