[November 25, 2014]

A.M. Best Places Ratings of Top Layer Reinsurance Ltd. Under Review with Negative Implications

A.M. Best has placed under review with negative implications the financial strength rating (FSR) of A+ (Superior) and the issuer credit rating (ICR) of "aa-" of Top Layer Reinsurance Ltd. (Top Layer) (Hamilton, Bermuda).

The ratings have historically reflected the substantial amount of support Top Layer receives from its co-owners, State Farm Mutual Automobile Insurance Company (State Farm) and Renaissance Reinsurance Ltd. (RenaissanceRe). The under review status is based on recent announcement that RenaissanceRe has entered into a definitive agreement to purchase Platinum Underwriters Holdings Ltd. (Platinum) (Bermuda). This transaction would give RenaissanceRe additional scale and help broaden its product offering. However, this transaction also represents a significant commitment on the part of RenaissanceRe to continue its move into the casualty business, which is outside of the organization's core competency of property catastrophe reinsurance.

The under review status will be removed once the deal closes and A.M. Best completes its analysis. Factors that could result in a negative rating action would be weakened risk-adjusted capitalization across the RenaissanceRe organization as a result of the acquisition, the perception that prospective operating results may be straind, the lack of retention of key personnel or details of the transaction that are not known to A.M. Best at this time. Factors that could lead to an affirmation would be strong risk-adjusted capital coupled with a well thought out business plan that demonstrates strong and stable operating performance going forward at the RenaissanceRe organization. In addition, A.M. Best is interested in understanding the tactical execution of the business plans as it relates to the combined organization.

The methodology used in determining these ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Key insurance criteria reports utilized:

• Catastrophe Analysis in A.M. Best Ratings

• Rating Members of Insurance Groups

• Risk Management and the Rating Process for Insurance Companies

• Understanding Universal BCAR

This press release relates to rating(s) that have been published on A.M. 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 visit Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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