AM Best has placed QBE Re on negative following the announcement that it plans to buy Hannover Re insurance operation...
AM Best has placed the financial strength ratings (FSR) of “A” (Excellent) and the issuer credit ratings (ICR) of “a” of QBE Re under review with negative implications.
AM Best has also placed the FSR of “A-“ (Excellent) and the ICR of “a-” for Praetorian Financial Group and its members under review with developing implications.
These rating actions follow the announcement that QBE Reinsurance intends to acquire Praetorian Financial Group from Hannover Re. The ratings will remain under review pending AM Best's review of the QBE Re transaction, integration plan and risk-adjusted capital position upon completion of the deal.
The transaction is expected to close in the second quarter of 2007, subject to regulatory approval. AM Best expects a level of support to be provided by QBE Re's ultimate parent, QBE Insurance Group, to fund the transaction. Although a significant level of due diligence is still to be completed by AM Best, based on the information disclosed, it is likely that the ratings of QBE Re and Praetorian Financial Group will be affirmed.
The ratings for Hannover Re are unchanged.
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