MUNICH RE BACK TO DOUBLE A WITH S&P

Rating agency Standard & Poor’s has raised the long-term counterparty credit and insurer financial strength ratings of Germany’s Munich Re to double A minus from the previous single A plus. The rating on primary insurance subsidiary Ergo was raised to single A from single A minus. The outlook for both entities was stable. S&P credit analyst Karin Clemens said that the upgrade reflected “increased certainty about the adequacy of Munich Re’s overall reserve position”, as well as sustained improvements in operating performance and a strong enterprise risk management framework. The agency said that it anticipated a return on equity of “at least 10% to 12%”, and a combined ratio of less than 100% in both the reinsurance and primary sectors. It said that a revision of Munich Re’s outlook to positive from stable would depend on the company outperforming these parameters.