|[October 10, 2013]
A.M. Best Upgrades Ratings of SCOR Global Life USA Reinsurance Company
OLDWICK, N.J. --(Business Wire)--
A.M. Best Co. has upgraded the financial strength rating (FSR) to
A (Excellent) from A- (Excellent) and the issuer credit rating (ICR) to
"a+" from "a-" of SCOR Global Life USA Reinsurance Company (SCOR
Global Life USA) (Wilmington, DE), formerly known as Generali USA Life
Reassurance Company. The outlook has been revised to stable from
A.M. Best also has affirmed the FSR of A (Excellent) and the ICRs of
"a+" of the North American life operating subsidiaries of SCOR SE
(SCOR) (France), SCOR Global Life Americas Reinsurance Company
(Wilmington, DE) and SCOR Global Life Re Insurance Company of Texas (Dallas,
TX) (collectively referred to as SCOR U.S.). The outlook for these
ratings is stable.
The rating upgrades for SCOR Global Life USA acknowledge SCOR's
successful track record of acquisitions and its expanding business
profile in the North American life reinsurance market. The ratings also
incorporate the explicit parental support provided by SCOR to SCOR
Global Life USA in the form of capital guarantee agreements and funding
solutions associated with Regulation XXX reserve requirements.
The affirmation of the ratings for SCOR U.S. reflects the parental
support, which includes guarantees, business flow optimization and other
resources received from SCOR. Additional rating factors considered were
SCOR U.S.' adequate risk-adjused capitalization and its ability to
offer diversified risk transfer solutions and value-added services
(marketing and underwriting) to its U.S.-based clients.
In addition, A.M. Best expects SCOR will benefit from the acquisitions
of Transamerica (News - Alert) Re (TARe) and more recently, SCOR Global Life USA. These
acquisitions have enabled the U.S. subsidiaries to support its parent's
focus on traditional life mortality business while gaining significant
scale in the North American life reinsurance market.
Despite the inherent risks attached to such a large acquisition, SCOR
has successfully integrated Transamerica Re under the close supervision
of its executive management team. While SCOR has demonstrated full
support and improved its internal controls, A.M. Best will monitor the
integration of its newly acquired entity, SCOR Global Life USA.
Additional negative rating factors include high levels of competition in
the North American life reinsurance market and historical volatility in
SCOR U.S.' statutory operating results as the result of its acquisition
strategy and integration costs of acquiring the traditional life
mortality business from TARe. SCOR U.S. also will need to manage the
reinvestment risk associated with re-deployment of cash in an extended,
albeit recently improving, low interest rate environment.
The group is well positioned at its current rating level. Factors that
could lead to future negative rating actions include a material decline
in risk-adjusted capitalization or a change in A.M. Best's view of the
strategic value of the SCOR U.S. entities to SCOR.
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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