29 Jan, 2021
Insurance ratings actions: Fitch downgrades Allstate Life Insurance
By Komal Nadeem
S&P Global Market Intelligence compiles ratings actions in the insurance space daily through 5 p.m. ET. Actions after 5 p.m. ET will be included in the following day's roundup.
U.S. and Canada
A.M.
The ratings reflect Federated Underwriting's balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management. The ratings also reflect the credit enhancement received from the company's ultimate parent, State Street Corp.
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Fitch Ratings affirmed the A- long-term issuer default rating and the F2 short-term issuer default rating of Allstate Corp. and the A+ insurer financial strength ratings of its property and casualty insurance subsidiaries. The outlooks are stable.
The entities are Allstate Vehicle & Property Insurance Co., Encompass Property & Casualty Co., Encompass Home & Auto Insurance Co., Allstate Texas Lloyd's, Allstate Property & Casualty Insurance Co., Allstate Indemnity Co., Encompass Insurance Co. of America, Allstate County Mutual Insurance Co., Allstate Insurance Co., Encompass Independent Insurance Co. and Encompass Insurance Co. of Massachusetts.
The affirmation of Allstate's property and casualty operations reflects the company's very favorable business profile with market-leading underwriting expertise and significant operating scale, strong risk-based capital position as well as very strong financial performance with persistent favorable underwriting margins and operating returns.
The agency downgraded the insurer financial strength ratings of Allstate Life Insurance Co. and Allstate Life Insurance Co. of New York to BBB form A+. Allstate Life Insurance Co. was placed on Rating Watch Negative and Allstate Life Insurance Co. of New York was placed on Rating Watch Evolving.
American Heritage Life Insurance Co.'s insurer financial strength rating was affirmed at A, with a stable outlook.
The downgrade follows the news that Allstate agreed to sell Allstate Life Insurance Co. and certain subsidiaries to entities managed by The Blackstone Group Inc. for $2.8 billion, pending regulatory approval.
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Moody's affirmed Jackson Financial Inc.'s Baa2 long-term issuer rating and the A2 insurance financial strength ratings of Jackson National Life Insurance Co. and Jackson National Life Insurance Co. of New York.
The agency also affirmed Jackson National Life Insurance's short-term insurance financial strength rating at P-1.
The ratings action follows the news that Prudential PLC plans to separate its U.S. business, Jackson Financial, in the second quarter through a demerger, subject to shareholder and regulatory approval.
The outlooks were changed to negative from stable, reflecting the lower-than-expected capitalization and the challenges the company faces in building capital, lowering proforma leverage and diversifying an in-force block of liabilities concentrated in variable annuities as it plans to separate from Prudential.
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Moody's affirmed the Aa3 insurance financial strength ratings of Allstate Insurance Co., Allstate Indemnity Co., Allstate Fire & Casualty Insurance Co. and Allstate Property & Casualty Insurance Co. The outlooks are stable.
The affirmation reflects the group's competitive position in the U.S. market for personal automobile and homeowners insurance, its excellent brand recognition, diversified revenue and earnings streams, multiple distribution channels and consistent cash flow generation.
At the same time, the rating agency downgraded the long-term insurance financial strength ratings of Allstate Assurance Co., Allstate Life Insurance Co. and Allstate Life Insurance Co. of New York to A3 from A2, and placed them on review for further downgrade. The outlook for the entities was changed to ratings under review from stable.
Allstate Life Insurance Co.'s short-term insurance financial strength was also downgraded at Prime-2.
The downgrades reflects the removal of the one notch of uplift resulting from the implicit financial support from Allstate following the news that the company is selling Allstate Life Insurance Co. and certain subsidiaries.
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Moody's affirmed the A1 insurance financial strength ratings of American Financial Group Inc.'s property and casualty operations, which includes Great American Insurance Co., Great American Alliance Insurance Co., Great American Assurance Co., Great American Casualty Insurance Co., Great American Contemporary Insurance Co., Great American E & S Insurance Co., Great American Fidelity Insurance Co., Great American Insurance Co. of New York, Great American Protection Insurance Co., Great American Spirit Insurance Co. and Great American Security Insurance Co.
The rating agency also affirmed the A3 insurance financial strength rating of Republic Indemnity Co. of America.
The rating outlooks for the entities is stable.
At the same time, Moody's placed Great American Life Insurance Co.'s A2 insurance financial strength on review for upgrade and changed the outlook to rating under review from stable.
The ratings action follows the news that American Financial entered into a definitive agreement to sell its annuity business to Massachusetts Mutual Life Insurance Co. for $3.5 billion in cash. The transaction is expected to close in the second quarter.
The ratings of Great American Insurance and affiliates reflect the group's expertise as a specialty-market underwriter across over 30 commercial insurance lines, consistently strong profitability, low exposure to catastrophe volatility and a performance-driven compensation structure.
Republic Indemnity Co. of America's rating is based on its leading market presence in workers' compensation insurance, particularly in California and the southeastern U.S., and its record of pursuing profitability over revenue growth in this cyclical business line.
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A.M. Best placed under review with developing implications the A+ financial strength rating and the "aa-" long-term issuer credit ratings of Great American Life Insurance Co. and its subsidiary, Annuity Investors Life Insurance Co.
The rating agency also placed under review with developing implications the B++ financial strength rating and the long-term issuer credit ratings of "bbb+" of Manhattan National Life Insurance Co., a life subsidiary of Great American Life Insurance.
The ratings action follows the announced sale of the Great American Life Group and Manhattan National Life Insurance to Massachusetts Mutual Life Insurance.
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Kroll Bond Rating Agency assigned the BBB issuer ratings to Kuvare US Holdings Inc. and Kuvare UK Holdings Ltd. and the A insurance financial strength ratings to its Lincoln Benefit Life Co. and United Life Insurance Co.
The rating agency also assigned the A- insurance financial strength rating to Kuvare Life Re Ltd., and upgraded Guaranty Income Life Insurance Co.'s insurance financial strength rating to A from A-.
The outlook on all ratings is stable.
The ratings reflect Kuvare's favorable earnings trends, sufficient capitalization, experienced management team, and the financial support and commitment of its capital partners.
Europe
S&P Global Ratings affirmed the A+ financial strength and issuer credit ratings of Westpac Lenders Mortgage Insurance Ltd. and removed the ratings from CreditWatch with negative implications. The outlook is negative.
The affirmation is based on Ratings' view of the insurer's stand-alone credit profile of bbb+ that mainly reflects its modest competitive position, which benefits from sound operating performance but is constrained by a lack of business diversity, as well as its satisfactory capital adequacy.
Asia-Pacific
A.M. Best affirmed the financial strength rating of A+ and the long-term issuer credit rating of "aa-" of Dai-ichi Life Insurance Co. Ltd., the wholly owned operating subsidiary of Dai-ichi Life Holdings Inc. The outlook of the credit ratings is stable.
The ratings reflect Dai-ichi Life's balance sheet strength, which A.M. Best categorizes as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management.
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Fitch affirmed the AA- the long-term issuer default rating of AIA Group Ltd. and the AA insurer financial strength ratings of AIA Co. Ltd., AIA International Ltd. and AIA New Zealand Ltd. The outlook is stable.
The affirmation reflects AIA's very strong capitalization, most favorable business profile, and prudent investment approach. It also takes into consideration the company's wide earnings sources despite the interruption of new business generation due to the avoidance of face-to face interaction resulting from the COVID-19 pandemic.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.
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