Gen Re ratings affirmed by AM Best with stable outlook

Highlights

AM Best affirmed Gen Re's A++ Financial Strength Rating and 'aa+' Long-Term ICRs with a stable outlook, citing the strongest balance sheet assessment.
Gen Re’s global diversification by geography and product line supports stable underwriting results and earnings, even amid elevated catastrophe losses.
Improved operating returns from disciplined underwriting and solid risk-adjusted capitalization continue to support capital growth despite a softening property reinsurance market.

Rating action and support factors

As reported by AM Best, the agency affirmed the Financial Strength Rating of A++ and the Long-Term Issuer Credit Ratings of "aa+" for General Reinsurance Corporation and its core property/casualty and life reinsurance subsidiaries, while also affirming the Long-Term ICR of "aa+" for General Re Corporation of Delaware. The outlook on all of the ratings remains stable.

AM Best says the affirmations reflect Gen Re's balance sheet strength, which it assesses at the strongest level, alongside adequate operating performance, a very favorable business profile and appropriate enterprise risk management. It adds that these factors are reinforced by Gen Re's status as a wholly owned subsidiary of Berkshire Hathaway Inc., giving the group added financial flexibility and investment expertise.

Global diversification underpins earnings stability

Gen Re operates with a global platform diversified by geography and product line, including international property/casualty and life reinsurance businesses. AM Best says that diversification supports stable underwriting results and overall operating performance even when the reinsurance sector faces unusually high catastrophe losses.

The agency says improved operating returns in recent years benefit from underwriting decisions that help the group capitalize on favorable market conditions in property/casualty reinsurance. It also says Gen Re's life reinsurance operations continue to contribute steady earnings, including positive underwriting income in most markets, and expects the group's overall operating performance to remain supportive of its current assessment despite softening conditions in the property reinsurance market.

AM Best adds that Gen Re's risk-adjusted capitalization remains in line with its strongest balance sheet assessment as measured by Best's Capital Adequacy Ratio. It says solid underwriting results and rising net investment income continue to support capital growth despite dividend payments to Berkshire Hathaway Inc., while the group's risk management program oversees exposures across its worldwide operations.

Earlier, we reported on sovereign ratings pressure as geopolitical shocks and elevated fiscal spending raise government funding risks.

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