AM Best has downgraded the financial strength rating of Hannover Re and its core subsidiaries from A+ (superior) to A (excellent).
At the same time, it has also downgraded the ratings to `bbb+' from `a' on the US$350m subordinated debt issued by Hannover Finance, due in March 2029, and the €350m subordinated debt issued by Hannover Finance SA, due in March 2031. Hannover Re guarantees both issues.
The ratings have been removed from the category of under review with negative implications, where they were placed in April this year. The outlook on all ratings is now negative.
AM Best said the ratings reflected its view that Hannover Re's prospective earnings were unlikely to be supportive of an A+ level of risk adjusted capital adequacy through the underwriting cycle, despite its recent capital increase.
