Munch Reinsurance Co. has repurposed a Bermuda unit that was authorized for property/casualty business into a reinsurer for its U.S. life reinsurance business.
The unit, Munich Re Bermuda, was formerly named Princeton Eagle West Insurance Co. Ltd. and was authorized to operate P/C business, all of which is in runoff. The company was renamed Munich Re of Bermuda in March 2018 and was repurposed as a Class C Insurer by the Bermuda Monetary Authority in order to serve as an authorized reinsurer of the Munich Re group.
Munich Re has said it will support the newly-repurposed entity by providing an excess of retention and excess of loss reinsurance treaty. The parent has also provided explicit support via a capital contribution of $330 million.
A.M. Best has assigned a Financial Strength Rating of A+ (Superior) and a Long-Term Issuer Credit Rating of “aa” to Munich Re of Bermuda, Ltd. (Munich Re Bermuda) (Bermuda), a wholly owned indirect subsidiary of Munich Reinsurance Co. The outlook assigned to these Credit Ratings (ratings) is stable, A.M. Best said.
A.M. Best said the ratings reflect Munich Re Bermuda’s “strategic importance and integration into its ultimate parent company, Munich Re,” as a vehicle for placing the group’s related life U.S. reinsurance business. Therefore, Munich Re Bermuda’s ratings are aligned with that of Munich Re, and reflective of the group’s balance sheet strength, which A.M. Best categorizes as strongest, as well as its strong operating performance, very favorable business profile and very strong enterprise risk management.
A.M. Best said its ratings of Munich Re and other main subsidiaries remain unchanged.
(This article was originally published by Insurance Journal.)