OLDWICK, N.J., December 21, 2022–(BUSINESS WIRE)–AM Greatest has revised the outlooks to constructive from secure and affirmed the Monetary Power Ranking of A- (Wonderful) and the Lengthy-Time period Issuer Credit score Rankings (Lengthy-Time period ICR) of “a-” (Wonderful) of Constancy & Warranty Life Insurance coverage Firm (Des Moines, IA) and Constancy & Warranty Life Insurance coverage Firm of New York, (New York, NY). These subsidiaries of Constancy & Warranty Life Holdings, Inc. are referred to collectively as Constancy & Warranty Life Group (FGL). As well as, AM Greatest has affirmed the Lengthy-Time period ICR of “bbb-” (Good) and the Lengthy-Time period Difficulty Credit score Ranking of “bbb-” (Good) on the $550 million 5.5% senior unsecured notes, due 2025 of Constancy & Warranty Life Holdings, Inc. (FGLH) (Delaware). The outlook of those Credit score Rankings (scores) has been revised to constructive from secure.
The scores replicate FGL’s steadiness sheet energy, which AM Greatest assesses as robust, in addition to its satisfactory working efficiency, impartial enterprise profile and acceptable enterprise danger administration.
The constructive outlooks replicate FGL’s increasing enterprise profile and the diversification advantages supplied by Constancy Nationwide Monetary, Inc. (FNF), which additionally ensures the group’s senior notes and has contributed $400 million of capital by way of the conversion of a $400 million intercompany mortgage to fairness over the previous yr. FNF additionally has built-in a number of features with FGL together with authorized, cyber safety and investor and exterior relations. FGL typically has maintained a prime 5 market place inside its core fixed-indexed annuity section via the impartial agent channel. Sturdy gross sales have continued to be enhanced by the addition of a number of new distribution channels that embrace regional banks and dealer sellers. As well as, FGL has just lately entered institutional markets with pension danger switch and funding settlement backed notes and has closed on a number of transactions efficiently over the previous yr. FGL additionally has skilled favorable development in its listed common life insurance coverage enterprise.
FGL maintains a really robust stage of risk-adjusted capitalization, as measured by Greatest’s Capital Adequacy Ratio (BCAR), because of the retention of favorable earnings and the aforementioned capital contribution from its dad or mum. FGL additionally maintains satisfactory liquidity resulting from robust working money flows and good give up safety on its in-force annuity blocks of enterprise. As well as, FGL has good monetary flexibility, with entry to the monetary markets via its holding firm, F&G Annuities and Life, Inc. (F&G). AM Greatest additionally notes that FNF just lately spun off 15% of its possession in FGL by way of a taxable dividend to FNF shareholders so as to improve and extra totally acknowledge the general market worth for FNF shareholders, and permit buyers to take a position straight in F&G. There are not any anticipated adjustments in technique, operations or administration at FNF or FGL on account of the transaction.
Whereas risk-adjusted capital stays very robust, the group’s general high quality of capital is diminished by the numerous enhance in reinsurance leverage and the usage of captive monetary options, in addition to the usage of surplus notes. Whereas FGL has demonstrated good monetary flexibility, execution dangers stay in accessing new capital to fund its development, and AM Greatest will proceed to watch the group’s means to take care of its present stage of risk-adjusted capitalization. The group additionally has skilled some volatility inside its statutory internet working outcomes resulting from reinsurance transactions, impacts from market volatility and different one-time occasions. Nevertheless, rate of interest spreads have remained favorable resulting from robust funding yields which have benefited from the latest rise in rates of interest and the repositioning of its funding portfolio into higher-yielding structured securities. AM Greatest expects general statutory and GAAP working outcomes to enhance over the close to to medium time period resulting from continued premium development and the upkeep of satisfactory rate of interest spreads inside its core fastened annuity enterprise.
This press launch pertains to Credit score Rankings which have been revealed on AM Greatest’s web site. For all score info referring to the discharge and pertinent disclosures, together with particulars of the workplace chargeable for issuing every of the person scores referenced on this launch, please see AM Greatest’s Latest Ranking Exercise net web page. For extra info concerning the use and limitations of Credit score Ranking opinions, please view Information to Greatest’s Credit score Rankings. For info on the right use of Greatest’s Credit score Rankings, Greatest’s Efficiency Assessments, Greatest’s Preliminary Credit score Assessments and AM Greatest press releases, please view Information to Correct Use of Greatest’s Rankings & Assessments.
AM Greatest is a worldwide credit standing company, information writer and information analytics supplier specializing within the insurance coverage trade. Headquartered in america, the corporate does enterprise in over 100 international locations with regional workplaces in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico Metropolis. For extra info, go to www.ambest.com.
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+1 908 439 2200, ext. 5159
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+1 908 439 2200, ext. 5098
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