A.M. Best Affirms Credit Ratings of Transatlantic Reinsurance Company and Alleghany Corporation

A.M. Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa-” of Transatlantic Reinsurance Company and its subsidiaries (collectively referred to as TransRe). In addition, A.M. Best has affirmed the Long-Term ICRs and the Long-Term Issue Credit Ratings (Long-Term IRs) of “a-” of Alleghany Corporation (Alleghany) [NYSE: Y] and Transatlantic Holdings Inc. TransRe and Alleghany are headquartered in New York, NY.

Concurrently, A.M. Best has affirmed the FSR of A+ (Superior) and the Long-Term ICRs of “aa-” of RSUI Indemnity Company and its reinsured subsidiaries, collectively referred to as RSUI Group (RSUI) (headquartered in Atlanta, GA).

A.M. Best also has affirmed the FSR of A (Excellent) and the Long-Term ICRs of “a” of Capitol Indemnity Corporation and its two subsidiaries, which operate under a pooling agreement, collectively referred to as CapSpecialty Insurance Group (CapSpecialty) (headquartered in Middleton, WI).

The outlook for each of these Credit Ratings (ratings) is stable. (Please see below for a detailed listing of the companies and ratings.)

The ratings reflect TransRe’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its adequate operating performance, very favorable business profile and appropriate enterprise risk management (ERM).

TransRe’s maintains a well-regarded business profile attributed to its book of business that is highly diversified by product and geography. TransRe also maintains favorable levels of risk-adjusted capitalization even under stressed scenarios and quality of capital is considered a positive rating aspect. Furthermore, TransRe has had consistent favorable prior year reserve releases on both a calendar and accident year basis in each of the past 10 years. While its operating performance is in line with peers, A.M. Best continues to expect that TransRe will produce favorable earnings, driven by underwriting income, with lower volatility relative to its peers over the course of the full cycle.

The ratings of RSUI reflect the group’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its strong operating performance, favorable business profile and appropriate ERM.

RSUI continues to support its rating with the strongest levels of risk-adjusted capitalization and an excellent track record of strong operating performance supported by underwriting results that have consistently outperformed the industry. While RSUI operates in a highly competitive environment with many large, well-established players, it has successfully carved out a favorable business profile with a focus on a wholesale distribution network.

The ratings of CapSpecialty reflect its balance sheet strength, which A.M. Best categorizes as very strong, as well as its marginal operating performance, neutral business profile and appropriate ERM.

CapSpecialty’s operating performance is considered marginal, which is largely reflective of its overall return metrics and an expense ratio that underperforms the industry. However, as CapSpecialty continues to reposition its book of business, this has translated into more prudent risk selection and a loss ratio that compares favorably with peers.

Alleghany’s ratings are indicative of the organization’s historic overall earnings capabilities, low levels of financial leverage and favorable financial flexibility, as well as its consistent track record of supporting its insurance operations.

The FSR of A+ (Superior) and the Long-Term ICRs of “aa-” have been affirmed with stable outlooks for Transatlantic Reinsurance Company and its following subsidiaries:

• TransRe Zurich Ltd.
• TransRe London Limited
• Fair American Insurance and Reinsurance Company
• Fair American Select Insurance Company
• Calpe Insurance Company Limited

The FSR of A+ (Superior) and the Long-Term ICRs of “aa-” have been affirmed with stable outlooks for the following members of RSUI Group:

• RSUI Indemnity Company
• Landmark American Insurance Company
• Covington Specialty Insurance Company

The FSR of A (Excellent) and ICRs of “a” has been affirmed with stable outlooks for the following members of CapSpecialty Insurance Group:

• Capitol Indemnity Corporation
• Platte River Insurance Company
• Capitol Specialty Insurance Corporation

The following Long-Term IRs have been affirmed with stable outlooks:

Alleghany Corporation—

-- “a-” on $300 million 5.625% senior unsecured notes, due 2020

-- “a-” on $400 million floating rate senior unsecured notes, due 2022

-- “a-” on $300 million 4.9% senior unsecured notes, due 2044

Transatlantic Holdings Inc.—

-- “a-” on $350 million 8% senior unsecured notes, due 2039

This press release relates to Credit Ratings that have been published on A.M. 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 A.M. 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 A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

A.M. 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 © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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