A.M. Best Affirms Ratings of Reinsurance Group of America, Incorporated and Its Subsidiaries

{"s" : "rga","k" : "a00,a50,b00,b60,c10,g00,h00,l10,p20,t10,v00","o" : "","j" : ""} Press Release Source: A.M. Best Co. On Tuesday December 14, 2010, 10:47 am EST

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has affirmed the financial strength rating (FSR) of A+ (Superior) and issuer credit ratings (ICR) of “aa-” of RGA Reinsurance Company (RGA Re) (St. Louis, MO) and RGA Life Reinsurance Company of Canada (RGA CN) (Toronto, ON). A.M. Best also has affirmed the ICR of “a-”and all existing ratings on debt securities of Reinsurance Group of America, Incorporated (RGA) (St. Louis, MO) (NYSE:RGA - News). The outlook for all ratings is stable. (See below for a detailed listing of the companies and ratings.)

The ratings of RGA and its two primary operating subsidiaries are based upon their strong franchise in the North American life reinsurance marketplace, favorable GAAP earnings and sufficient risk-adjusted statutory capital position. The ratings also consider the continued growth and diversification benefits derived from RGA’s international reinsurance segments and opportunities for growth in select international markets. While fluctuations in mortality have historically affected RGA’s earnings performance, volatility in mortality results tempered in recent quarters, resulting in more favorable earnings performance. RGA’s strong position in the North American life reinsurance market combined with its good persistency, international expansion opportunities and consistent contributions from its financial reinsurance and asset-intensive business segments support its consistently favorable operating results.

Offsetting factors include challenges facing RGA’s ability to improve market share in North America at a time when cession rates are very low, current tight credit market conditions and the highly competitive nature of the life reinsurance market. In addition, A.M. Best expects RGA’s earnings over the next cycle to be pressured by the low interest rate environment.

A.M. Best views RGA’s debt servicing capabilities favorably, with cash flows supported by profitable operations. RGA’s financial leverage ratios remain within A.M. Best’s guidelines for the current ratings. Moreover, based upon A.M. Best’s analytical results, RGA’s overall liquidity on a statutory basis is favorable to meet its short-term funding needs, while long-term liquidity is more closely aligned with longer dated assets. RGA historically maintains strong asset liability management capabilities and sufficient statutory risk-adjusted capital positions.

The ICR of “a-” has been affirmed for Reinsurance Group of America, Incorporated.

The following debt ratings have been affirmed:

Reinsurance Group of America, Incorporated—

-- “a-”on $200 million 6.75% senior unsecured notes, due 2011

-- “a-” on $300 million 5.625% senior unsecured notes, due 2017

-- “a-” on $400 million 6.45% senior unsecured notes, due 2019

-- “bbb” on $400 million junior subordinated debentures, due 2065

RGA Capital Trust I—(guaranteed by Reinsurance Group of America, Inc)

-- “bbb” on $225 million 5.75% trust preferred income equity redeemable securities (PIERS), due 2051

The following indicative ratings available under shelf registration have been affirmed:

Reinsurance Group of America, Incorporated—

-- “a-” on senior debt

-- “bbb+” on subordinated debt

-- “bbb” on preferred stock

RGA Capital Trust III and IV—

-- “bbb” on trust preferred securities

The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Life and Health Insurers”; “Rating Members of Insurance Groups”; “A.M. Best’s Perspective on Operating Leverage”; “Equity Credit for Hybrid Securities”; “Assessing Country Risk”; “A.M. Best’s Liquidity Model for U.S. Life Insurers”; “Review of BCAR Treatment for XXX Captives”; and “A.M. Best’s Ratings & the Treatment of Debt.” Methodologies can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2010 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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A.M. Best Affirms Ratings of Safety National Group and Its Members

{"s" : "dfg","k" : "a00,a50,b00,b60,c10,g00,h00,l10,p20,t10,v00","o" : "","j" : ""} Press Release Source: A.M. Best Co. On Monday December 13, 2010, 3:30 pm EST

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and issuer credit ratings of “a” of Safety National Group, whose members include Safety National Casualty Corporation (SNCC) (St. Louis, MO) and its reinsured affiliate, Safety First Insurance Company (SFIC) (Chicago, IL). The outlook for all ratings is stable.

The affirmations reflect the group’s strong operating performance, solid capitalization achieved in part through explicit capital support from its parent, Delphi Financial Group, Inc. (Delphi Financial) [NYSE: DFG], and its established market presence within the excess workers’ compensation market.

Partially offsetting these positive rating factors are areas of ongoing, yet declining, adverse loss release development occurring on prior accident years and the impact of investment market fluctuations, which has hampered the group’s ability to internally generate capital. Despite these concerns, the outlook recognizes the group’s historically solid profitability levels, which outperform its peer composite, and A.M. Best’s expectation that SNCC should generate surplus growth through strong earnings over the near term.

The positive rating attributes reflect SNCC’s disciplined underwriting standards, service-oriented business approach and experienced management team. Furthermore, Delphi Financial is fully committed to supporting SNCC’s operations, while maintaining a moderate level of financial leverage with solid interest coverage ratios and historically excellent earnings produced by its insurance subsidiaries. The ratings also acknowledge the inherent synergies between Delphi Financial’s insurance entities, which include the sharing of management expertise, client bases, products, distribution and expenses.

The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition, which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; “Rating Members of Insurance Groups”; “A.M. Best’s Ratings & the Treatment of Debt”; “Natural Catastrophe Stress Test Methodology”; and “The Treatment of Terrorism Risk in the Rating Evaluation.” Methodologies can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2010 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

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