S&P Global Ratings affirmed the BBB+ issuer credit ratings of American Financial Group Inc. and Great American Financial Resources Inc.
The rating agency also affirmed the A+ issuer credit and financial strength ratings of Great American International Insurance (EU) Designated Activity Co. and American Financial Group's core property and casualty subsidiaries, American Empire Insurance Co., Republic Indemnity Co. of California, Republic Indemnity Co. of America, Oklahoma Surety Co., Mid-Continent Casualty Co., Great American Spirit Insurance Co., Great American Security Insurance Co., Great American Protection Insurance Co., Great American International Insurance (UK) Ltd., Great American Insurance Co. of New York, Great American Insurance Co., Great American Fidelity Insurance Co., Great American E&S Insurance Co., Great American Contemporary Insurance Co., Great American Casualty Insurance Co., Great American Assurance Co., Great American Alliance Insurance Co., Bridgefield Employers Insurance Co., Bridgefield Casualty Insurance Co. and American Empire Surplus Lines Insurance Co.
S&P Global Ratings also placed under CreditWatch with developing implications the A+ issuer credit and financial strength ratings of Great American Life Insurance Co. and Annuity Investors Life Insurance Co.
Additionally, the rating agency affirmed the AA+ long-term financial strength and issuer credit ratings of Massachusetts Mutual Life Insurance Co. and its core subsidiaries, C.M. Life Insurance Co. and MML Bay State Life Insurance Co. The outlook remains stable.
The ratings actions follow American Financial Group's announcement that it had entered into a definitive agreement to sell its annuity business to MassMutual for $3.5 billion in cash. The transaction is expected to close in the second quarter.
The stable outlook on American Financial Group reflects S&P Global Ratings' expectation that the company will continue to demonstrate top-tier underwriting stability and that its property and casualty business will maintain very strong capital adequacy.
The credit fundamentals at the A+ level for American Financial Group's core property and casualty operating companies reflect a prudent underwriting performance and a diversified business mix with a decentralized operation. The rating agency said these strengths would lead to continued minimal volatility in underwriting performance as the group takes advantage of the hardening pricing market.
The stable outlook on MassMutual indicates the rating agency's expectation that the company will maintain a diversified product portfolio and an excellent competitive position and financial risk profile as it continues to grow its whole life insurance business.
While the proposed acquisition will likely strain MassMutual's capital adequacy, the transaction will provide an opportunity for the company to grow its fixed-indexed annuity offering and gain access to a third-party distribution platform, according to S&P Global Ratings.
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.
