AM Best Affirms Credit Ratings of Reinsurance Group of America, Incorporated and Its Subsidiaries
August 14 2019 - 3:34PM
Business Wire
AM Best has affirmed the Financial
Strength Rating of A+ (Superior) and the Long-Term Issuer Credit
Ratings (Long-Term ICR) of “aa-” of RGA Reinsurance Company (Chesterfield,
MO), RGA Americas Reinsurance
Company, Ltd (Bermuda) and its subsidiaries,
RGA Life Reinsurance Company of
Canada (Toronto, Canada) and RGA Atlantic Reinsurance Company Ltd.
(Barbados). These companies collectively are referred to as RGA. AM
Best also has affirmed the Long-Term ICR of “a-” and all Long-Term
Issue Credit Ratings (Long-Term IR) on the debt securities and
indicative shelf ratings of Reinsurance Group of America,
Incorporated (Chesterfield, MO) [NYSE: RGA]. The outlook of
these Credit Ratings (ratings) is stable. (See below for a detailed
listing of the companies and Long-Term IRs.)
The ratings reflect RGA’s balance sheet strength, which AM Best
categorizes as very strong, as well as its strong operating
performance, favorable business profile and very strong enterprise
risk management (ERM).
RGA’s balance sheet strength remains solid and the consolidated
risk-adjusted capitalization remains at the strongest level, as
measured by Best’s Capital Adequacy Model. The absolute level of
capital and surplus has increased over the past several years
within RGA Reinsurance Company, which is the primary U.S. statutory
entity, due to the retention of favorable earnings. Overall balance
sheet strength also benefits from significant operating cash flows,
moderate financial leverage and a high quality investment portfolio
composed of over 70 percent fixed-income securities, of which
approximately 97% are investment grade. However, the company relies
on captive finance solutions for its redundant reserves.
RGA’s operating results have been favorable, with strong premium
growth reported in recent periods within the majority of its core
segments and particularly in Asia. Total life reinsurance in-force
also has continued to increase at a healthy pace in recent periods.
RGA benefits from its leading market positions in the United
States, Canada, Europe and Asia. AM Best notes that approximately
45% of revenues come from international operations. As one of the
top five global life reinsurers, RGA enjoys the benefits of high
barriers to entry from new start-ups, and the group continues to
create innovative solutions for new and existing clients, resulting
in continued global expansion. However, AM Best notes the
increasing level of higher-risk product lines including annuities,
longevity reinsurance and long-term care, which may result in
increased levels of operating volatility over the medium to longer
term.
The following Long-Term IRs have been affirmed with a stable
outlook:
Reinsurance Group of America, Incorporated—
-- “a-” on $400 million 6.45% senior unsecured notes, due
2019
-- “a-” on $400 million 5% senior unsecured notes, due 2021
-- “a-” on $400 million 4.7% senior unsecured notes, due
2023
-- “a-” on $400 million 3.95% senior unsecured notes, due
2026
-- “a-” on $600 million 3.9% senior unsecured notes, due
2029
-- “bbb+” on $400 million 6.2% fixed to floating subordinated
debentures, due 2042
-- “bbb+” on $400 million 5.75% fixed to floating rate
subordinated debentures, due 2056
-- “bbb” on $400 million variable rate junior subordinated
debentures, due 2065
The following indicative Long-Term IRs available under shelf
registrations have been affirmed with a stable outlook:
Reinsurance Group of America, Incorporated—
-- “a-” on senior unsecured debt
-- “bbb+” on subordinated debt
--“bbb” on preferred stock
RGA Capital Trust III and IV—
-- “bbb” on trust preferred securities
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 Understanding
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 rating agency and information provider
with a unique focus on the insurance industry. Visit www.ambest.com
for more information.
Copyright © 2019 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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version on businesswire.com: https://www.businesswire.com/news/home/20190814005696/en/
Michael Adams Senior Financial Analyst +1 908 439 2200, ext.
5133 michael.adams@ambest.com
Christopher Sharkey Manager, Public Relations +1 908 439
2200, ext. 5159 christopher.sharkey@ambest.com
Edward Kohlberg Director +1 908 439 2200, ext. 5664
edward.kohlberg@ambest.com
Jim Peavy Director, Public Relations +1 908 439 2200, ext.
5644 james.peavy@ambest.com
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