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Insurance ratings actions: Cigna under rating watch

S&P Global Market Intelligence compiles ratings actions in the insurance space daily through 5:30 p.m. ET. Actions after 5:30 p.m. ET will be included in the following day's roundup.

Life and health

Fitch Ratings has affirmed Sun Life Financial Inc.'s long-term issuer default rating at A and the insurer financial strength rating of its subsidiary, Sun Life Assurance Co. of Canada, at AA- (Very Strong).

The rating outlook remains positive, reflecting Sun Life's active management of its liability profile through various derisking initiatives as well as its very strong capital adequacy measures, Fitch said.

The rating agency said it views Sun Life's capital adequacy as very strong on a risk-adjusted basis.

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Fitch has affirmed the long-term issuer default ratings at A of Manulife Financial Corp. and its subsidiary Manufacturers Investment Corp.

The rating agency has also affirmed Manufacturers Life Insurance Co.'s long-term issuer default rating at A+ and its insurer financial strength rating at AA-.

Concurrently, Fitch has affirmed the insurer financial strength ratings at AA- of John Hancock Life Insurance Co. (U.S.A.), John Hancock Life Insurance Co. of New York and John Hancock Life & Health Insurance Co. The rating agency has also affirmed the long-term issuer default rating at A+ of John Hancock Life Insurance Co. (U.S.A.).

The rating outlook is stable.

Manulife Financial's ratings reflect the company's very strong, diversified business profile, very strong capitalization and continued improvement in its core earnings capabilities, Fitch said.

The rating agency views Manulife Financial's financial leverage measures as somewhat elevated versus its peers and sees the company's U.S. segment, operating under the John Hancock brand, as core to the overall Manulife family of companies.

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Fitch Ratings has affirmed the long-term issuer default ratings at A+ of Great-West Lifeco Inc. and its subsidiaries GWL&A Financial Inc. and Canada Life Financial Corp.

The rating agency has also affirmed the insurer financial strength ratings at AA (Very Strong) of Great-West Lifeco's operating subsidiaries, Great-West Life Assurance Co., Canada Life Assurance Co., Great-West Life & Annuity Insurance Co., London Life Insurance Co., Great-West Life & Annuity Insurance Co. of New York, Irish Life Assurance Plc and Canada Life International Re Ltd.

Additionally, Fitch has affirmed the long-term issuer default ratings at AA- of Great-West Life Assurance and Canada Life Assurance.

The rating outlook is stable.

The affirmation is based on Great-West Lifeco's very strong capitalization, strong competitive position in the Canadian market, consistently strong and stable core insurance earnings, conservative investment profile and overall actuarial liability profile, Fitch said.

Managed care

Fitch Ratings has placed the ratings of Cigna Corp. and its rated operating subsidiaries on Rating Watch Negative.

The ratings action follows Cigna's agreement to acquire pharmacy benefit manager Express Scripts Holding Co.

The affected ratings include the A+ insurer financial strength ratings of Cigna's insurance company subsidiaries Connecticut General Life Insurance Co., Life Insurance Co. of North America, Cigna Life Insurance Co. of New York and Cigna Worldwide Insurance Co., as well as the A- issuer default rating and the F2 short-term issuer default rating assigned to Cigna.

The Rating Watch Negative reflects Fitch's concerns with respect to a sharp rise in financial leverage following the close of the transaction. Additional concerns include potential operational disruptions that could arise as the companies are combined, although management has indicated that it expects to operate Express Scripts' business largely as a stand-alone business unit, the rating agency said.

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S&P Global Ratings has also placed its ratings on Cigna and its core insurance subsidiaries, Connecticut General Life Insurance and Cigna Health & Life Insurance Co., on CreditWatch with negative implications following the Express Scripts deal announcement.

S&P believes the transaction has long-term strategic and competitive merits related to scale and business diversity. The rating agency will resolve the CreditWatch once Cigna launches its long-term debt financing for the transaction.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.