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FOR IMMEDIATE RELEASE
OLDWICK - SEPTEMBER 19, 2014 10:36 AM (EDT)
A.M. Best has affirmed the financial strength rating of A+ (Superior) and issuer credit rating of "aa-" of Hannover Life Reassurance Company of America (HLRA) (Orlando, FL). The outlook for both ratings is stable.
The ratings of HLRA's parent, Hannover Rueck SE (Hannover Re) (Germany), have been extended to HLRA and reflect HLRA's role as a key global operating subsidiary of Hannover Re. HLRA markets life reinsurance solutions in the United States, an important global market for Hannover Re. HLRA generates approximately one-third of Hannover Re's worldwide life/health gross written premiums.
The ratings also reflect HLRA's adequate risk-adjusted capital position, which benefits from the significant use of internal reinsurance with its parent and affiliates, a diverse business model and profitable operating performance. HLRA continues to be recognized as one of the market leaders in acquiring in-force blocks of business and providing capital management solutions to the life, health and Medicare insurance industries in the United States. Furthermore, HLRA increased its U.S. ordinary recurring reinsurance market share to 10.6% at year-end 2013 from 9.2% at year-end 2012.
Offsetting rating factors include the potential for future volatility in certain HLRA's statutory operating performance and balance sheet metrics. HLRA operates a transaction-oriented business model supported by the use of affiliate retrocession, which can result in fluctuating financial results. A.M. Best believes that HLRA will be challenged to continue its recent premium growth trends given the competitive state of the life reinsurance market.
Positive rating actions for HLRA could occur if A.M. Best were to take a positive rating action on Hannover Re. Factors that could result in negative rating actions for HLRA include a negative rating action taken by A.M. Best on Hannover Re or a material deterioration in A.M. Best's view of the strategic importance of HLRA to Hannover Re.
The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.