Transatlantic Holdings Subs Downgraded
A.M. Best Co. downgraded the financial strength rating of Transatlantic Reinsurance Company and Putnam Reinsurance Company to “A+” (superior) from “A++” (superior). Concurrently, Best assigned the group members an issuer credit rating of “aa” and Transatlantic an issuer credit rating of “a.” The outlook was revised to stable from negative.
The downgrade reflects the deterioration in the group’s risk-adjusted capital, which is below that necessary to support the “A++” (superior) rating. The negative outlook had indicated that risk-adjusted capital had deteriorated in the prior two years due to the group’s premium growth, driven by rate increases and significant reserve strengthening actions taken.
The group’s risk-adjusted capitalization is at the low end for similar rated companies; however, the rating and stable outlook continue to reflect Transatlantic’s long-standing strategic relationship with its majority owner, American International Group Inc., which beneficially owns 60 percent of Transatlantic.