|[August 23, 2013]
A.M. Best Affirms Ratings of Hannover Life Reassurance Company of America
OLDWICK, N.J. --(Business Wire)--
A.M. Best Co. has affirmed the financial strength rating of A+
(Superior) and issuer credit rating of "aa-" of Hannover Life
Reassurance Company of America (HLRA) (Orlando, FL). The outlook for
both ratings is stable.
The ratings reflect HLRA's role as a key global operating subsidiary of Hannover
Rueck SE (Hannover Re) (Germany). HLRA operates as a marketer of
life reinsurance solutions for the United States, an important global
market for Hannover Re. HLRA generates approximately one-third of
Hannover Re's worldwide life and health gross written premiums.
The ratings also reflect HLRA's adequate risk-adjusted capital position,
which includes leverage through surplus notes owned by Hannover Re. HLRA
continues to be recognized as one of the market leaders in acquiring
in-force blocks of business and providing capital management solutions
to the life, health and Medicare insurance industries in the United
States. Furthermore, HLRA increased its U.S. ordinary recurring
reinsurance market share to 9.2% as of year-end 2012 while increasing
assumed business production b nearly 40% over the prior year.
Offsetting rating factors include the ongoing volatility inherent in
HLRA's statutory operating performance and balance sheet metrics. HLRA
operates a transaction-oriented business model supported by the use of
parental and affiliate retrocession, which has produced fluctuating
financial results over the years. A.M. Best believes that HLRA will be
challenged to continue its recent premium growth trends given the highly
competitive state of the life reinsurance market.
A.M. Best views HLRA as being well positioned at its current rating
level for the foreseeable future. Factors that could result in negative
rating actions for HLRA include a significant and sustained decline in
risk-adjusted capitalization as measured by Best's Capital Adequacy
Ratio (BCAR) model, net operating performance that does not meet A.M.
Best's expectations, a negative rating action taken by A.M. Best on
Hannover Re or a material deterioration in A.M. Best's view of the
strategic importance of HLRA to Hannover Re.
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.
A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS
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