Swiss Re Affirmed

A.M. Best Co. affirmed the “A++” FSR of Swiss Reinsurance Co., Zurich. The rating is based on Swiss Re’s superior financial strength, historically excellent overall earnings and solid leadership position within the global reinsurance market. Its conservative reserving philosophy, high quality investment portfolio and prudent risk management strategy—which enables the company to manage volatility stemming from its underwriting and investment portfolio— contribute to Swiss Re’s superior level of capitalization. Over the past five years, Swiss Re has consistently generated excellent overall earnings, despite weaker underwriting returns within its dominant non-life book of business, stemming from prolonged competitive market conditions.

Partially offsetting these positive rating factors is Swiss Re’s historically weaker and volatile earnings within its non-life reinsurance business segment. Unsatisfactory underwriting performance in this business segment over the previous three years has been largely attributable to competitive pricing and relaxed underwriting practices, which prevailed throughout the non-life market. Furthermore, Swiss Re’s higher overall expense position and its exposure to natural and man-made catastrophe losses — particularly the 1999 European windstorms, Lothar and Martin — curtailed underwriting performance over this period.