A.M. Best Revises Outlook to Stable for Transatlantic Holdings, Inc. and Its Subsidiaries

November 10, 2009 9:32 AM EST

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has revised the outlook to stable from negative for Transatlantic Holdings, Inc. (New York, NY) (NYSE: TRH) and its subsidiaries.

A.M. Best also has affirmed the financial strength ratings of A (Excellent) and issuer credit ratings (ICR) of "a" of Transatlantic Holdings, Inc. Group (Transatlantic) and its members, Transatlantic Reinsurance Company (New York, NY) and Trans Re Zurich (Switzerland), along with Transatlantic's separately rated member, Putnam Reinsurance Company (New York, NY).

Concurrently, A.M. Best has affirmed the ICR of "bbb", debt rating of "bbb" on $750 million 5.75% senior unsecured notes, due 2015, as well as the indicative debt ratings of "bbb" on senior unsecured securities and "bbb-" on the subordinated securities under the shelf registration of Transatlantic Holdings, Inc.

The ratings reflect Transatlantic's highly regarded business profile as a leading international reinsurance organization, with a diverse book of predominately casualty-oriented business. The ratings also consider the group's strong management team and successful track record of stable and consistent operating results. Over the past year, in addition to the market challenges of operating a reinsurance organization, Transatlantic has faced issues such as ownership uncertainty, which put pressure on areas such as employee retention, business retention and financial flexibility. These challenges were compounded by a period of severe turmoil in the financial markets. Transatlantic has demonstrated that its solid franchise is sufficient to overcome these potential obstacles. Throughout 2009, a benign catastrophe season coupled with a robust recovery in the financial markets has aided Transatlantic in strengthening its balance sheet, and as a result, A.M. Best's concerns regarding the Transatlantic franchise have been alleviated, thereby warranting the revision in the outlook.

Partially offsetting these positive rating attributes are concerns regarding the soft casualty market, from which Transatlantic derives a significant portion of its premiums as well as reserve adequacy on casualty-oriented business. While Transatlantic has experienced favorable loss reserve development and/or modest unfavorable development over the last two years, A.M. Best will continue to closely monitor its reserve adequacy and potential exposure to inflation pressures.

For Best's Credit Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

    Source: A.M. Best Co.

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