Yesterday, the credit rating of Everest Re Group Ltd. (RE) was upgraded by Standard & Poor’s Ratings Services (S&P). The upgrade reflects Everest’s significant liquidity position and its financial flexibility.
S&P raised the counterparty credit ratings on Everest Re Group and its U.S.-based intermediary holding company, Everest Reinsurance Holdings Inc., to ‘A-‘ from ‘BBB+.’
According to the S&P, Everest maintains reasonable financial leverage and solid interest coverage. Additionally, the company has a sturdy liquidity position and significant marketable assets on its balance sheet.
S&P has also affirmed the ‘A+’ counterparty credit and financial strength ratings on the company’s main operating subsidiaries — Everest Reinsurance (Bermuda) Ltd. (Bermuda Re), Everest Reinsurance Co., Everest National Insurance Co. and Everest Reinsurance Co. (Ireland) Ltd. The outlook is stable.
The affirmation comes as S&P acknowledges the operating subsidiaries’ solid competitive position in the market, global presence, good risk-adjusted capital levels and financial flexibility. These positives are, however, partially offset by the potential volatility in earnings from unfavorable reserve development and low reinsurance usage.
Last month, the company provided initial loss estimates from the earthquake in Chile and the European Windstorm Xynthia. The initial loss estimates are significant. Everest Re expects to incur $225 million of losses for the earthquake in Chile and around $25 million for the Windstorm Xynthia. The loss estimates are net of tax and reinstatement premiums.
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