Fitch maintains outlook on PartnerRe

Fitch maintains outlook on PartnerRe

The proposed acquisition of PartnerRe by Italian investment company Exor has not resulted in a rating action by Fitch, the agency confirmed yesterday.

When at the end of January 2015 Axis Capital and PartnerRe announced their planned nil premium merger Fitch placed PartnerRe on Rating Watch Negative (RWN). This reflected an increased level of near-term uncertainty for the reinsurer – including the departure of chief executive Costas Miranthis immediately after the announcement of the deal. Fitch also noted there was "the potential for other key PRE employees that are not expected to be part of the combined company to depart before the merger".

With the future ownership of PartnerRe now "in play". Fitch said that it considered the reinsurer to be "ion a more vulnerable competitive position". Fitch does not think that the Exor proposal lessens that vulnerability.

Fitch said that if PartnerRe accepts Exor's offer, the agency would probably maintain PartnerRe's RWN, with the ultimate rating of and outlook for PartnerRe being dependent upon Fitch completing an analysis of Exor's credit quality and strategic plan for PartnerRe.

Exor is not rated by Fitch, and the agency is not privy to Exor's strategic plans.

The company concluded: "Fitch could downgrade ratings should the merger with Axis fail to be completed or should experience a significant loss of business, a departure of key personnel or an increase in risk profile prior to the closing of the merger with Axis."

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