Overview -- We are assigning a 'zaAA+' South Africa national scale rating to South Africa-based reinsurers Hannover Reinsurance Africa Ltd. and Hannover Life Reassurance Africa Ltd. -- We are also affirming our 'A-' ratings on the two companies. -- The negative outlook on the two companies reflects that on South Africa. Rating Action On Nov. 27, 2012, Standard & Poor's Ratings Services assigned its 'zaAA+' South Africa national scale rating to Johannesburg-based Hannover Re Africa Ltd. (HRAL) and Hannover Life Reassurance Africa Ltd. (HLRAL). We also affirmed our 'A-' global scale long-term counterparty credit and insurer financial strength ratings on HRAL and HLRAL. The outlook on these entities is negative. Rationale The ratings on HRAL and HLRAL (collectively, the Hannover Re Africa subgroup) reflect our view of the subgroup's strategic importance to the Hannover Re group, and its good operating performance. These strengths are partially offset by high business risk stemming from the subgroup's business model, the exposure of its business and investment portfolios and deposits to South Africa, and the influence of general country risk factors on the subgroup's business franchise and financial profiles. Outlook The negative outlook on HRAL and HLRAL reflects that on South Africa. If we were to lower the sovereign credit rating on South Africa, we would also lower the ratings on HRAL and HLRAL in line with those on the sovereign. Based on current information, we consider an upgrade to be unlikely. Related Criteria And Research All articles listed below are available on RatingsDirect on the Global Credit Portal. -- Group Methodology, April 22, 2009 -- Interactive Ratings Methodology, April 22, 2009 -- Understanding National Rating Scales, April 14, 2005 -- Criteria Update: Factoring Country Risk Into Insurer Financial Strength Ratings, Feb. 11, 2003 Ratings List New Rating Hannover Reinsurance Africa Ltd. Hannover Life Reassurance Africa Ltd. South Africa National Scale zaAA+/--/-- Ratings Affirmed Hannover Reinsurance Africa Ltd. Hannover Life Reassurance Africa Ltd. Counterparty Credit Rating A-/Negative/-- Financial Strength Rating A-/Negative/-- Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.