AM Best has affirmed the Financial Strength Rating (FSR) of A++ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “aa+” (Superior) of Transatlantic Reinsurance Company and its subsidiaries (collectively referred to as TransRe). In addition, AM Best has affirmed the Long-Term ICRs and the Long-Term Issue Credit Ratings (Long-Term IRs) of “a+” (Excellent) of Alleghany Corporation (Alleghany) and Transatlantic Holdings, Inc. The outlook of these Credit Ratings (ratings) is stable. All companies are headquartered in New York, NY. (See below for a detailed listing of the companies and ratings.)

The ratings reflect TransRe’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, very favorable business profile, appropriate enterprise risk management, along with the implicit and explicit support provided by the ultimate parent, Berkshire Hathaway Inc. (Berkshire) [NYSE: BRK A and BRK B].

TransRe’s balance sheet strength assessment reflects consistently supportive risk-adjusted capitalization, as well as significant internal reinsurance support provided by Berkshire, which possesses vast financial resources and financial flexibility. As a diversified reinsurer that assumes a significant portion of U.S. casualty risk, TransRe is exposed to unfavorable secular trends including social inflation, which have led to widespread reserve strengthening for (re)insurance underwriters. However, AM Best notes that TransRe’s loss reserve development has been steadily favorable for a prolonged period of time, and attributes this to the organization’s prudent approach to cycle management and conservative approach to establishing its initial loss picks. As a result, TransRe’s performance has remained consistently solid, including in periods with elevated catastrophe activity.

While favorable conditions in the property reinsurance market are currently showing signs of moderate softening, overall property reinsurance conditions remain broadly attractive. The company continues to achieve rate increases in many other key business lines, as it curtails premiums written in areas where pricing appears to be inadequate. TransRe’s earnings are further supported by increasing net investment income derived from its investment portfolio, which is predominantly composed of high quality, short-duration fixed income instruments, and heavily weighted toward U.S. treasuries.

The FSR of A++ (Superior) and the Long-Term ICRs of “aa+” (Superior) have been affirmed with stable outlooks for Transatlantic Reinsurance Company and its following subsidiaries:

• TransRe Europe S.A.
• TransRe London Limited
• Fair American Insurance and Reinsurance Company
• Fair American Select Insurance Company
• Calpe Insurance Company Limited

The following Long-Term IRs have been affirmed with stable outlooks:

Alleghany Corporation—

-- “a+” (Excellent) on $300 million 4.9% senior unsecured notes, due 2044

Transatlantic Holdings Inc.—

-- “a+” (Excellent) on $350 million 8% senior unsecured notes, due 2039

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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