Moody’s has affirmed an Aa1 insurance financial strength rating on Berkshire Hathaway-owned General Reinsurance Corporation.

It has also affirmed a Prime-1 rating on the commercial paper of parent holding company General Re.

The ratings outlook is stable. Moody’s says its decision is based on General Reinsurance’s “strong market presence and franchise in the global reinsurance market, [and] a focus on direct distribution, solid underwriting results, moderate operating leverage and catastrophe risk exposure”.

It notes the company has strong capitalisation and the implicit support of Berkshire Hathaway.

Moody’s says General Re’s strengths are tempered by competitive pressures in the global reinsurance market, long-tail casualty risk, catastrophe risk and investment risk.

“Given General Re’s current rating, its business profile and the competitive environment in the reinsurance sector, Moody’s notes there is limited potential for upward rating movement.”

However, an upgrade of Berkshire-owned affiliate National Indemnity Company, which provides retrocession to General Re, could prompt an upgrade.