A.M. Best Co. has revised the outlook to positive from stable and affirmed the issuer credit ratings (ICR) of “a” of Transatlantic Reinsurance Company (Transatlantic), Fair American Insurance and Reinsurance Company (both domiciled in New York, NY) and Trans Re Zurich Reinsurance Company Ltd. (Switzerland). A.M. Best also has affirmed the financial strength ratings (FSR) of A (Excellent) of Transatlantic and its members. The outlook for the FSRs is stable. Concurrently, A.M. Best has revised the outlook to positive from stable and affirmed the ICR of “bbb” and debt ratings of “bbb” on $750 million 5.75% senior unsecured notes due 2015 and the $350 million 8% senior unsecured notes due 2039 of the parent holding company; Transatlantic Holdings Inc. (New York, NY) (NYSE: TRH). The rating affirmations reflect Transatlantic’s strong capitalization and excellent business profile. Although 2011 operating results were affected by the multiple worldwide catastrophes resulting in a combined ratio of 113.9% for the year, Transatlantic’s five-year average operating performance is still in line with its peer group. As a casualty oriented writer, Transatlantic has a history of consistent operating results complemented by strong investment income. Transatlantic maintains a formalized risk management framework that recognizes risk categories and allocates ownership of each category. Furthermore, the company maintains an economic capital model, which is used to analyze various risk scenarios and as a guide for developing business mix. The positive outlook on Transatlantic’s ICRs reflects A M Best’s acknowledgement of the company’s improved risk-based capitalization and expectation that current risk-based capitalization levels will be sustained. Transatlantic’s debt-to-capital ratio is expected to remain in the high teens as capital is anticipated to be enhanced by strong earnings. Fixed charge coverage is expected to rebound in 2012 and register in the seven to eight times range. Partially offsetting these positive attributes are A.M. Best’s concerns regarding the current soft pricing conditions in the casualty market from which Transatlantic derives a substantial portion of its premiums as well as the reserve adequacy of pre 2001 casualty oriented business. A.M. Best’s concern regarding pre 2001 reserve adequacy is mitigated by the declining percentage of these reserves relative to the company’s total reserves.