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Insurance ratings actions: A.M. Best affirms Cigna, subsidiaries

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Insurance ratings actions: A.M. Best affirms Cigna, subsidiaries

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. Best affirmed the financial strength ratings of A and the long-term issuer credit ratings of "a" of the key life and health subsidiaries, health maintenance organizations and New Zealand- and Europe-based insurance companies of Cigna Corp., including Belgium-based Cigna Life Insurance Co. of Europe SA/NV and New Zealand-based Cigna Life Insurance New Zealand Ltd.

The rating actions follow the closing of Cigna's acquisition of Express Scripts Holding Co.

Concurrently, A.M. Best removed from under review with developing implications and affirmed the financial strength ratings of A- and the long-term issuer credit ratings of "a-" of Medco Containment Life Insurance Co. and Medco Containment Insurance Co. of New York.

Additionally, A.M. Best affirmed the financial strength ratings of A- and the long-term issuer credit ratings of "a-" of the Cigna-Healthspring companies.

The rating agency also affirmed the long-term issuer credit ratings of "bbb" of Cigna and Cigna Holding Co. and the long- and short-term issue credit ratings of Cigna Holding.

Lastly, A.M. Best withdrew the indicative long-term issue credit ratings of Cigna Holding.

The outlook assigned to these ratings is stable.

A.M. Best said the ratings of the majority of Cigna's operating subsidiaries reflect high financial leverage of approximately 49%, and high level of goodwill at Cigna, the ultimate parent. In addition, there is a significant execution risk related to the Cigna-Express Scripts merger given the vertical nature of the transaction, the rating agency noted.

The balance sheet strength assessment of these entities is strong, which is supported by risk-adjusted capitalization at the strongest level along with good liquidity and cash flows from operations, according to the rating agency.

A.M. Best said the ratings of Medco Containment Life and Medco Containment Insurance Co. of New York reflect their balance sheet strength, which A.M. Best categorizes as strongest, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The ratings of Cigna Life Insurance Co. of Europe reflect its balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The ratings of CIGNA Life Insurance New Zealand reflect its balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management, the agency added.

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S&P Global Ratings withdrew its ratings of Fireman's Fund Insurance Co. of Hawaii Inc., following its merger with the parent company, Fireman's Fund Insurance Co.

S&P said the withdrawal reflects the merger of the two entities, which effectively took place Dec. 31, 2018. However, the rating agency said the merger of the two entities does not change its assessment of the parent's strategy.

Europe

A.M. Best removed from under review with positive implications and upgraded the long-term issuer credit rating to "a+" from "a-" of Germany-based Talanx AG, the intermediate holding company of Haftpflichtverband der Deutschen Industrie V.a.G, while assigning a financial strength rating of A to Talanx AG.

A.M. Best also removed from under review with developing implications and affirmed the financial strength rating of A and the long-term issuer credit rating of "a+" of Ireland-based Talanx Reinsurance (Ireland) SE.

The outlook assigned to these ratings is stable.

The ratings reflect Talanx AG's and Talanx Re's strategic importance to Haftpflichtverband der Deutschen Industrie, and hence, the ratings reflect the group's very strong balance sheet strength, its strong operating performance, favorable business profile and appropriate enterprise risk management, the rating agency said.

The rating actions for Talanx AG reflect the approval of a reinsurance license from the German regulator, The Federal Financial Supervisory Authority, or BaFin, which will allow the company to write reinsurance business, effective Jan. 1.

The rating affirmations of Talanx Re reflect its continuing strategic importance as a vehicle to manage the retention and provide technical support to the group's Industrial Lines division, acting as a captive, A.M. Best added.

Asia-Pacific

A.M. Best withdrew the financial strength rating of B++ and the long-term issuer credit rating of "bbb" of New Zealand-based The Education Benevolent Society Inc.

The rating agency said it withdrew the ratings because the company has requested to no longer participate in A.M. Best's interactive rating process.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.

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