Fitch Ratings has upgraded PartnerRe’s Issuer Default Rating (IDR) to ‘A’ from ‘A-‘ and senior unsecured debt ratings to ‘A-‘ from ‘BBB+’.
Fitch has also upgraded the Insurer Financial Strength (IFS) rating of Partner Reinsurance Company, the company’s principal reinsurance operating subsidiary, to ‘AA-‘ (Very Strong) from ‘A+’ (Strong), and removed all ratings from the Rating Watch Positive. The rating outlook is stable.
Fitch’s upgrade follows the recently company’s recent acquisition by Covea, a French mutual insurer, for a total cash consideration of $9.1 billion.
The upgrade reflects a one-notch ratings uplift due to the change in ownership to Covea. Fitch does not maintain public ratings on Covea but does internally monitor the company’s consolidated credit quality, which Fitch considers to be superior to PRE’s standalone ‘A+’ IFS assessment.
Fitch views PRE’s strategic importance to Covea as “Very Important” per Fitch’s group rating methodology as PRE’s size makes it a significant addition to Covea.
The acquisition provides Covea diversification outside of France, as Covea maintains a leading market position in French property and casualty, but has minimal global reinsurance business.
Fitch expects Covea to offer reasonable support to PRE as needed and to conservatively manage the reinsurers’ capitalisation. Fitch also expects the company to continue to manage its operations generally independent of Covea, as it did under previous owner EXOR.