Hannover Life Reassurance Bermuda Ltd. has been affirmed the financial strength rating of A (excellent) and the issuer credit rating of "a+" by AM Best Co.

The outlook for both ratings remains stable, in line with that of its parent company, Hannover Rueckversicherung AG.

The ratings reflect the company's strong level of risk-adjusted capitalisation, good underwriting profitability and high level of integration within the Hannover Life Reinsurance (HLR) group.

Best considers that HLR Bermuda's currently strong level of risk-adjusted capitalisation is likely to be maintained throughout the next two to three years as the company expands its operations.

The company's good level of risk-adjusted capitalisation is supported by the full retention of profits, a conservative investment portfolio and outwards reinsurance protection of a good credit quality, according to the ratings agency.

Underwriting profits have driven good overall earnings, which are represented by an anticipated return on equity of around 11.4 percent in 2009, up from the 7.3 percent achieved in 2008. Best considers that good bottom line focused underwriting guidelines and a strong level of risk management are likely to enable continuing underwriting profitability in future years.

In Best's opinion, HLR Bermuda is fully integrated into the HLR group's long-term business plans. The entity's location allows the group access to a more relaxed regulatory environment compared to its other subsidiaries and also a zero tax rate zone, added Best.