AMSTERDAM–(BUSINESS WIRE)–#insurance–AM Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa” (Superior) of Munich Reinsurance Company (Munich Re) (Germany) and its subsidiaries. AM Best also has affirmed the Long-Term ICR of “a” (Excellent) of Munich Re America Corporation (Munich Re America) (Princeton, NJ) and the Long-Term Issue Credit Ratings (Long-Term IR) of Munich Re and Munich Re America. The outlook of these Credit Ratings (ratings) is stable. See below for a detailed listing of all companies and ratings.

The ratings reflect Munich Re’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, very favourable business profile and very strong enterprise risk management.

Munich Re’s balance sheet strength is underpinned by risk-adjusted capitalisation that exceeds the level required to support the strongest assessment, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best expects risk-adjusted capitalisation to remain at the strongest level, despite the group’s exposure to potentially large losses and its record of substantial dividend payments and share buy-backs. In addition, the group’s financial leverage is relatively low and it benefits from excellent financial flexibility.

The group’s operating performance is strong, demonstrated by a 10-year weighted average return-on-equity ratio of 8.1% (2011-2020). In 2020, Munich Re reported a net profit of EUR 1.2 billion (2019: EUR 2.7 billion). The group’s property/casualty (P/C) reinsurance division reported a net profit of EUR 571 million despite exposure to substantial COVID-19 pandemic-related losses totalling approximately EUR 3 billion, as well as, to a lesser extent, natural catastrophe and man-made events. Life & Health (L&H) reinsurance and ERGO reported net profits of EUR 123 million and EUR 517 million, respectively, demonstrating the benefits of the group’s good earnings diversification. EUR 370 million in COVID-19-related losses was attributed to the L&H segment, stemming mainly from its North American mortality business. At ERGO, COVID-19-related losses totalled EUR 64 million.

Munich Re is a leading global reinsurer and its business profile benefits from excellent diversification, with the performance of its various life, health and P/C operations largely uncorrelated. Given its global market presence and excellent brand, the group is well-positioned to benefit from improved P/C reinsurance market conditions.

The FSR of A+ (Superior) and the Long-Term ICRs of “aa” (Superior) have been affirmed with stable outlooks for Munich Reinsurance Company and its following subsidiaries:

Great Lakes Insurance SE

New Reinsurance Company Ltd.

Munich Reinsurance America, Inc.

The Princeton Excess and Surplus Lines Insurance Company

American Alternative Insurance Corporation

Bridgeway Insurance Company

Munich American Reassurance Company

Munich Reinsurance Company of Canada

Temple Insurance Company

American Family Home Insurance Company

American Modern Home Insurance Company

American Modern Insurance Company of Florida, Inc.

American Modern Lloyds Insurance Company

American Modern Select Insurance Company

American Southern Home Insurance Company

American Western Home Insurance Company

American Modern Property and Casualty Insurance Company

Munich Re of Bermuda, Ltd.

Digital Edge Insurance Company

Digital Affect Insurance Company

Digital Advantage Insurance Company

The following Long-Term IRs have been affirmed with stable outlooks:

Munich Reinsurance Company—

— “a+” (Excellent) on EUR 900 million 6.25% subordinated fixed to floating rate bonds, due 2042

— “a+” (Excellent) on GBP 450 million 6.625% subordinated fixed to floating rate bonds, due 2042

Munich Re America Corporation—

— “a” (Excellent) on USD 500 million 7.45% senior unsecured notes, due 2026

American Alternative Insurance Corporation—

— “a+” (Excellent) on USD 92.5 million 5.0% surplus notes

The Princeton Excess and Surplus Lines Insurance Company—

— “a+” (Excellent) on USD 20.1 million 5.0% surplus notes

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Victoria Ohorodnyk
Associate Director, Analytics
+31 20 308 5432
victoria.ohorodnyk@ambest.com

Christopher Sharkey
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Mathilde Jakobsen
Director, Analytics
+31 20 308 5427
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Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

Gregory Dickerson
Associate Director
+1 908 439 2200, ext. 5161
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