S&P Sees No Ratings Change for Swiss Re Subsidiaries

Standard & Poor’s Ratings Services said that its ratings and outlooks on the European subsidiaries of Zurich-based global reinsurer Swiss Reinsurance Co. -rated “AA-/Stable/A-1+” – remain unchanged following the announcement by the group with regard to the future reorganization of its European legal structure (See IJ web site March 13).

S&P rates the following entities, which are affected by Swiss Re’s announced plans to alter its corporate structure, “AA-” with a stable outlook:
— Swiss Reinsurance Co. U.K. Ltd.;
— Swiss Re Life & Health Ltd.;
— SR International Business Insurance Co. Ltd.;
— Swiss Re Denmark Reinsurance A/S;
— Swiss Re Frankona Rückversicherungs Aktiengesellschaft;
— Swiss Re Germany AG;
— Swiss Reinsurance Ireland Ltd. (previously GE ERC Strategic Reinsurance Ltd.);
— Swiss Re Ireland Ltd.;
— Swiss Re Life & Health Nederland N.V.; and
— Algemene Levensherverzekering Maatschappij N.V.

S&P said it “understands that it is Swiss Re’s intention to fully transfer all existing reinsurance and insurance liabilities and assets from its current subsidiaries to the new carriers, as well as to write future business via the new entities.

“The move is driven by capital efficiency, compliance, and reporting requirements, and the desire to avoid duplication of existing entities. Swiss Re is aiming to have the new structure in place by mid-2009.

“In light of the importance of Europe to the group and our current classification of all affected subsidiaries as core, Standard & Poor’s expects to consider the three new Luxembourg-based group carriers as core to Swiss Re and assign ratings accordingly,” the bulletin continued. “We also expect that Swiss Re will very carefully manage the transition of carriers for affected business.”

S&P indicated that if all of the transfers from the existing to the new carriers are successfully carried out, “it will maintain its core status on the ratings on Swiss Re’s existing carriers upon transfer, before likely withdrawing the ratings at the group’s request. If reinsurance and insurance liabilities and assets are not fully transferred, Standard & Poor’s will lower its ratings on the concerned existing subsidiaries to ‘BBB’, reflecting their run-off status.”